OLDEST  BANK 
IN  AMERICA 

Capital,  $1,000,000 

Surplus.  $2,250,000 

It  kas  every  lacility 
for  handling  the  business 
of  large  ana  small  ae- 
positors,  corporations, 
firms  ancl  individuals. 

THE  BANK  OF 
NORTH   AMERICA 

(National     Bank) 
305-307-309  CHESTNUT  STREET 


0". 


y 


THE 


BANKER'S 


COMMON-PLACE  BOOK: 


CONTAINING 


I. — A  TREATISE  ON  BANKING.     BY  A.  B.  JOHNSON,  ESQ.,  OP  UTICA,   N.  T. 
n.— TEN  MrNUTEs'   ADVICE  ON  KEEPING  A  BANKER.      BY  J.   W.   GILBART,   ESQ. 

in.— byi.es  on  the  foreign  law  of  bills  of  exchange. 

IV.  — REMARKS  ON  BILLS  OF  EXCHANGE.      BY  JOHN  RAMSEY  M'CULLOCH,  ESQ. 
v.— FORMS  OF  BILLS  OF  EXCHANGE,   IN   EIGHT   EUROPEAN  LANGUAGES. 
YI, — FORMS  OF  NOTICE  OF  PROTEST,   WITH  REMARKS. 
Vn. — FINANCIAL     AND     COMMERCIAL     MAXIMS.         BY     AMERICAN     AND     FOREIGN 

AUTHORS. 
Vm. — A  CHAPTER  ON  YOUNG  MEN. 
IX.— THE  CURIOSITIES  OF  NUMBERS. 
X. — DECISIONS    ON  BANKING,    BY    THE    SUPEEMB    COURT    OF    MASSACHUSETTS. 
XI.— ON  THE  DUTIES  AND  MISDOINGS  OP  BANK  DIRECTORS.      BY  A.   B.   JOHNSON. 
Xn.— SUGGESTIONS   TO   YOUNG   CASHIERS   ON  THE   DUTIES  OP  THEIR  PROFESSION. 
PRIZE   ESSAY. 
Xin. — A  NUMISMATIC  DICTIONARY  ;   OR,   AN  ACCOUNT  OF  COINS  OP  ALL  COUNTRIES. 


"  While  a  hanker  adheres  with  regularity  to  known  forms  of  hisiuess  and  settled 
principles.  Providence  is  a  guarantee  for  his  success  ;  but  when  he  deviates  from  these. 
Providence  is  almost  equally  a  guarantee  of  disaster,  both  personal  ajid  official" 


IsTEW  YORK:    33    MIUKRA-Y    ST.    ISrO. 


PUBLISHED  AT  THE  OFFICE  OF  THE  BANKER'S  MAGAZINE. 
JPricr,  $1.50. 


PREFACE. 


JT]      I'HK  following  trealise  on  Banking,  written  by,  perhaps,  the  olJest  practical  banlcer  in 
■'^  America,  was  published  originally  in  the  June  number  of  the  Bankers'  Magazine,  for 
1849.     It  was  extensively  noticed  by  the  daily  press  in  many  parts  of  our  Union,  and 
its  information  on  the  subject  of  banking  was  deemed  so  useful  to  every  class  of  pur- 
sons,  tliat  several  of  the  papers  in  the  State  of  New  V'ork  recommended  that  a  copy  of 
the  treatise  should  be  placed  in  every  school  district  library  in  the  State.     No  doubt  thd 
procurement  of  bank  loans  would  be  facilitated  by  a  knowledsp  that  Kink  loans  are  not 
^..  properly  accorded  as  personal  favors,  or  distributed  by  tlte  caprice  of  bankers,  (tliougU 
—  such  erroneous  opinions  are  not  uncommon,)  but  depend  on  principles  which  the  trea- 

>  tise  disciose.s,  and  which  can  be  conformed  to  by  persons  who  aeanc  uj  ui,>.vu.<9  bor- 

a 

TZ  rowers. 

The  Bankers'  Magazine,  of  London,  quoted  largely  from  the  work,  and  with  inu-U 

commendation;  and  bankers  everywhere  who  have  seen  it  seem  to  unite  in  its  praise. 

Tlie  first  edition  is  now  out  of  print,  except  as  it  exists  in  the  third  volume  of  lh4 

Bankers'  Magazine,  bound  up  with  the  otlier  matter  of  the  volume,  and  some  copies  of 

^1  which  are  still  for  sale  by  the  editor  and  at  several  of  his  agencies  in  different  cities 

jj  But  as  inquiries  for  the  treatise  are  numerous,  from  different  places,  and  an  order  for  a 

\;J^^  Copy  of  the  work  has  just  lieen  received  from  Paris,  the  editor  has  republished  it,  care- 

\fuUy  revised  by  the  author,  and  accompanied  it  willi  several  otlier  articles  from  otiier 

sources;   but  making,  in  the  whole,   a  volume    that   cannot    fail  of  being  useful  to 

bankers,  and  to  readers  of  every  kind  who  desire  a  knowledge  of  what  haa  heretofore 

beet  deemed  the  occult  science  of  Banking. 


386377 


CONTENTS. 


I.  A  Treatise  on  Banking,  the  Duties  of  a  Banker,  and  nis  Per- 
sonal Re(}uisites  therefor.  By  A.  B.  JOHNSON,  Esq.,  President  of 
the  Ontario  Branch  Bank,  Utica;  Author  of  "  A  Treatise  on  Language, 
or  the  Halation  which  V/ords  bear  to  Things,"  "  Religion  in  its  Relation 
to  the  Present  Life,"  etc. 


PART  FIRST.  — THE  BANK. 

Page 
I.    Of  Discount  or  Interest 7 

II.     Difference  among  Banks  as  to  the  Allowable  Rate  of  Interest 7 

in.    The  Profits  to  a  Baiiic  from  its  Bank  Notes  and  Deposits 8 

rV.     Bank  Dividends 9 

v.     Benefits  to  the  Public  from  the  use  of  Bank  Notes •   ■  .   .   .      9 

VI.     Relative  Utility  to  the  Public  of  the  Safety  Fund  and  Free  Banks 10 

VII.    Loss  to  the  Public  from  Insolvent  Bank  Notes  . 11 

Vin.    The  Safety  Fund  System  of  New  York 12 

IX.    Relative  Lucrativeness  to  Bank  Owners  of  the  Safety  Fund  and  Free  Banks  .    12 

X.    Free  Banking  in  New  York 13 

XI.     Relative  EflTecls  on  City  and  Country  Capitalists  of  the  Safety  Fund  and  Free 

Bank  Systems ". 14 

XII.     Relative  Effects  on  City  and  Country  Commerce  of  the  Safety  Fund  and  Free 

Bank  Systems 14 

Xin.     Difl^erenl  Legal  Privileges  accorded  to  different  Safety  Fund  Banks 15 

XIV.     Difference  in  the  Productiveness  of  Different  Magnitudes  of  Bank  Capital .   .    16 
XV.    The  Currency 16 

XVI.  The  Currency  of  the  State  is  a  sort  of  Measure  of  the  Business  of  the  Stale  .    16 

XVII.  The  Business  of  the  Stale  is  a  sort  of  Guarantee  to  Banks  for  the  Permanence 

of  a  given  amount  of  Currency 17 

XVIII.     A  Surplusage  of  Currency  can  never  exist  long 17 

XIX.     The  Extinguishment  of  Bank  Circulation  and  Deposits,  and  the  Extinguish- 
ment of  Debts  lue  to  Banks,  preserve  a  pretty  uniform  equality  .   .   .    13 

XX.     Specie  Payments. — Specie  Suspensions '..........  18,  19 

XXI.     Suspension  of  Specie  Payments  by  a  single  Solvent  Bank 19 

XXII.    Legal  Tender 9 

XXIII.  Receivables  and  Treasury  Notes 20 

XXIV.  A  National  Currency 20 

XXV.     Expansions  of  the  Bank  Note  Currency 21 

XXVI.    The  Spirit  of  Speculation  is  Contagious 22 

XXVII     Expansion  of  Bank  Deposits 2? 


CONTENTS.  V 

Pag. 

KXVIII.     Conlraclioii  of  the  Currency 22 

XXIX.     Pericidicul  CoiUraciions 23 

XXX.    Preiisure  Cuntracliun 23 

XXXI.     Panic 24 

XXXII.     The  Pressure  in  the  Interior 24 

XXXm.    The  Pressure  and  Panic  Tcrnr.nale 2.3 

XXXIV.    Tlie  Sale  of  Exchange 25 

XXXV      Collections  within  ti\e  M.<<tft 26 

XXXVI     Collections  out  of  the  Slate .  26 


PART  SECOND.— THE  BANKER. 

I.  The  Objects  of  Banking 23 

II.  The  Pecuniary  Prosperity  of  his  Bank  should  constitute  the  Pecuniary 

Object  of  the  Banker 29 

III.  Specie  Suspen.sions  are  never  necessary  to  Banks 29 

IV.  The  Interests  of  Debtors  and  Dealers  should  be  subordinate  to  the  Interests 

of  the  Bank 30 

V.  Security 3U 

VI.  Moral  Security 31 

VII.  Security  founded  on  the  iVIorality  of  the  Debtor 31 

VIII.  Security  founded  on  the  Ha^iis  of  a  Debtor 31 

IX.  Security  founded  on  the  Nature  of  a  Man's  Business 31 

X.  Security  founded  on  the  Application  of  the  Loan 32 

XI.  Security  founded  on  the  Character  of  the  Paper  that  is  to  be  Discounted    .  32 

XII.  Acceptances  in  ailvar.ee  of  Consignments 32 

Xin.  Assimilated  Notes  and  Acceptances 32 

XTV.  Kiting.  —  Dummies.  —  Void  Notes  and  Drafts 33 

XV.  OfGains 34 

XVI.  When  to  be  Moderate 34 

XVII.  The  kind  of  Paper  that  a  Banker  should  prefer 34 

XVIII.  Selection  of  Loans  founded  on  Incidental  Circulation  and  Deposits    ....  35 

XIX.  Selection  of  Loans  founded  on  tile  Place  of  their  Repayment 36 

XX.  Selection  of  Loans  founded  on  the  Sale  of  Exchange 37 

XXI.  Selection  of  Loan.s  founded  on  the  Commission  for  their  Collection    ....  37 

XXII.  Selection  of  Loans  founded  on  the  Time  they  are  to  endure      38 

XXIII.  Time  Estimated  with  reference  to  the  Prospective  Wants  of  a  Bank    ...  38 

XXIV.  Time  with  reference  to  Panics  and  Pressures 39 

XXV.  A  Banker  should  acquaint  himself  with  th«  Pecuniary  Circumstances  of  his 

Dealers 39 

XXM.  A  Banker  should,  as  far  as  is  practicable,  know  the  Signatures  of  his  Dealers  40 

XXVII.  A  Banker  should  know  the  Residence  of  Endorsers 41 

XXVIII.  A  Banker  should  know  the  Pecuniary  Condition  of  his  Bank 42 

XXIX.  Prospective  Resources 42 

XXX.  Provision  for  the  Future 42 

XXXI.  General  Supervision 43 

XXXII.  Overdrafts 43 

XXXIII.  Enforcement  of  Payments 43 

XXXIV.  Adherence  to  Good  Principles 44 

XXXV.  A  Banker  should  beware  of  Persuasion,  and  of  undue  Pertinacity  in  Appli- 
cants   44 

1# 


VI  CONTENTS. 

Pago 

XXXVI.    A  Banker  should  beware  of  Speculators 44 

XXXVII.    A  Banker  should  keep  independent  of  his  Debtors 45 

XXXVIII.    Economy 45 


PART  THIRD— THE  MAN. 

I.    Re  should  be  wary  of  Recommendations 47 

II.     He  should  be  governed  by  his  own  Judgment. 47 

IIL     Final  Remarks. — Contingent  Expenses. — Dividends 48 


Ten  Minutes'  Advice  oh  Keeping  a  Bankee.    By  J.  W.  Gilbaet,  Esq 49 


CONTENTS  OF  PART  SECOND. 


I.    The  Law  of  Bills  of  Exchange.     By  J .  Baenaed  B yles 60 

II.    Laws  and  Customs  respecting  Bills  and  Notes.     By  John  Ramsay  McCul- 

LOCH 83 

III.  Forms  of  Bills  of  Exchange  ordinarily  used  in  the  French,  German,  Dutch, 

Italian,  Spanish,  Portuguese,  Swedish,  and  Danish  languages 93 

IV.  Forms  of  Notice  of  Protest  used  iu  New  York,  Boston,  Philadelphia,  Rich- 

mond, Auburn,  &c.,  with  Remarks 96 

V.    Banking,  Financial,  and  Commercial  Maxims 101 

VI.    A  Chapter  on  Young  Men 114 

VII.     The  Curiosity  of  Figures 118 

VIII.     Decisions  of  the   Supreme  Judicial   Court  of  Massachusetts  on  Banks, 

Cashiers,  Notaries,  Stockholders,  Bills,  and  Notes 119 

IX.    On  the  Duties,  Omissions  .and  Misdoings,  of  Bank  Directors.     By  A.  B. 

Johnson,  of  Utica 138 

X.     Suggestions  to  Young  Cashiers  on  the  Duties  of  their  Profession.     Prize 

Essay.     By  Loeenzo  Sahine 148 

XL    A  Numismatic  Dictionary,  or  Names  of  Coins  of  aU  Nations 166 


\  TREATISE  ON   BANKINa 

BY  A.  B.  JOHINSON. 


PART    FIRST.  — THE    BANK. 

Of  Discount  or  Interest.  —  Banking  consists,  principally,  in  lending 
money  at  the  legal  rate  of  interest,  and,  sometimes,  under.  The  loans 
are  called  discounts  because  the  interest  is  paid  in  advance  and  deducted 
trom  the  amount  of  the  note.  But  if  a  bank  were  to  deduct  seven  dol- 
lars from  a  hundred  dollar  note  payable  a  year  after  date,  the  bank 
would  receive  seven  dollars  for  a  loan  of  only  ninety-three  dollars.  To 
avoid  such  a  result,  which  is,  probably,  an  excess,  beyond  the  legal 
rate  of  seven  per  cent,  interest,  the  bank  deducts  from  the  note  as  much 
ess  than  seven  dollars,  as  will  prevent  any  illegal  excess  of  interest. 
The  bank  pays  ninety-three  dollars  and  forty-six  cents  for  the  note,  be- 
cause that  sum,  if  placed  on  interest  for  a  year,  will  become  a  hundred 
dollars  ;  just  the  amount  of  the  note.  Formerly  all  the  banks  of  our 
state  would  have  deducted  seven  dollars  from  the  note  ;  and  such  a  mode 
of  computation  has  been  adjudged  in  England  to  be  legal,  and  has  been 
twice  thus  adjudged  by  our  Supreme  Court.  But  several  years  ago,  in 
a  case  before  the  Court  of  Errors,  the  then  Chancellor  stated,  incident- 
ally, that  he  deemed  such  a  computation  usurious.  Since  then,  all  the 
banks  in  the  state,  except  some,  or  all,  in  the  city  of  New  York, 
have,  from  timidity  or  caution,  adopted  the  modified  calculation,  as 
above  exemplified,  even  when  calculating  interest  on  notes  that  are  to 
mature  in  two  or  three  months.  If,  however,  the  original  mode  of  cal- 
culating is  defensible  at  law,  (some  eminent  lawyers  insist  it  is  defensi- 
Dle,)  the  legality  ought  to  be  established  by  adjudication  or  legislation, 
for  the  benefit  of  the  banks  who  refrain  from  that  mode  of  computing 
discount,  and  for  the  safety  of  uch  as  hazard  the  computation. 

Diference  amons;  Bards  as  to  the  Allowable  Bate  of  Discount.  —  All  the 
safety  fund  banks  of  our  state  are  restricted,  in  the  compulntion  of 
uiterest,  to  six  per  cent,  the  year  on  notes  and  drafts  that  will  become 


8  A   TREATISE    ON    BANKING, 

payable  in  sixty  days  or  less,  from  the  time  of  the  discoun, ;  but  wtia; 
are  termed  free  banks  are  permitted  to  take  seven  per  cent.  In  the  early 
periods  of  banking,  when  banks  were  located  in  only  large  commercial 
cities,  nearly  all  loans  were  of  the  above  short  description ;  and  as  no 
mode  of  computing  six  per  cent,  discount  will  make  the  interest  excped 
the  legal  rate  of  seven  per  cent.,  banks  took  the  whole  of  such  discount 
in  advance  ;  hence,  probably,  arose  the  practice  of  deducting,  in  advance, 
the  seven  per  cent.,  also,  on  loans  that  exceeded  sixty  days  in  duration  ;  — 
the  question  of  usury  being  either  unthought  of,  or  deemed  inapplicable 
to  such  transactions.  So,  probably,  originated  the  practice  of  computing 
sixty  days  as  the  sixth  part  of  a  year  in  all  calculations  of  bank  dis- 
counts. The  computation  resulted  in  no  usury  while  applied  to  six  per 
cent,  loans,  but,  subsequently,  when,  from  habit  or  inadvertence,  sixty 
days  were  called  by  banks  the  sixth  part  of  a  year,  in  seven  per  cent, 
calculations,  and  ninety  days  were  called  the  fourth  part  of  a  year, 
all  the  banks  cf  the  Slate  about  twenty-five  years  ago  suddenly  discov- 
ered, by  an  accidental  decision  of  the  Supreme  Court,  that  nearly  all  the 
bank  securities  then  existing  were  void  in  law ;  and  at  least  one  bank 
lost  largely  by  the  discovery. 

The  Profits  to  a  Bank  from  its  Ba?ik  Notes  and  Deposits.  —  A  bank 
which  should  possess  a  capital  limited  to  a  hundred  thousand  dollars, 
could  lend  only  a  hundred  thousand  dollars,  if  it  possessed  neither  bank 
notes  of  its  own  creation,  nor  deposits  of  other  persons'  money  ;  hence, 
such  a  bank  could  gain  but  six  per  cent,  the  year  on  its  capital,  if  its 
loans  were  made  on  securities  that  would  mature  iii  sixty  days,  or  but 
seven  per  cent,  if  its  loans  were  made  on  longer  securities.  But  from 
this  six  or  seven  per  cent,  would  have  to  be  deducted,  the  salaries  of  the 
bank's  officers,  the  rent  of  its  banking  house,  its  stationery,  fuel,  taxes, 
&c.,  so  as  to  leave  of  its  income,  to  be  divided  among  its  stockholders, 
not  more  than  from  three  to  five  per  cent,  the  year,  —  a  dividend  smaller 
than  the  productiveness  of  capital  in  other  occupations,  and,  consequent- 
ly, destructive  to  the  continuance  of  banking. 

By  means,  however,  of  lending  bank  notes  of  its  own  creation,  such  a 
bank  may  be  able  to  lend  much  more  than  the  amount  of  its  capital ; 
and  im.-ease  its  profits  accordingly.  And  if  the  borrowers  or  other 
persons,  will  deposit  with  the  bank  a  portion  of  their  money,  the  bank 
can  lend,  also,  some  part  of  these  deposits,  and  thereby  enlarge  further 
the  profits  of  the  bank.  The  effect  is  alike,  therefore,  of  circulation  and 
deposits;  and  the  nature  of  them  is  similar;  —  circulation  is  deposits 
inside  out,  while  deposits  are  circulation  outside  in.  Both  also  must  be 
paid  by  the  bank  on  demand,  and  the  bank  knows  n'"  ~'hen  the  pay- 
ment of  either  may  be  demanded ;  but  so  long  as  any  bank  possesses,  daily, 
a  sufficiency  of  money  tc  pay  all  the  deposits  and  bank  notes  whose 
payment  is  daily  demanded,  the  bank  feels  at  liberty  to  lend  on  interest 


THE    BANK.  9 

the  excess.  Prom  tlie  last  December  official  returns,  on  oath,  sent  tc 
the  Comptroller,  by  the  one  hundred  and  eighty-four  banks  of  our  state, 
their  aggregate  capital,  including  accumulated  profits,  and  deducting  the 
money  invested  in  banking  houses,  a  little  exceeds  forty-seven  millions 
of  dollars,  which  is  all  loaned  on  interest ;  and  in  addition  thereto,  some 
more  than  forty-five  millions  of  their  bank  notes  and  deposits ;  hence, 
we  discover  the  amount  of  benefit  which  banks  derive  practically  from 
their  bank  notes  and  deposits. 

Bank  Dividends.  —  The  benefit  derived  from  circulation  and  deposits, 
though  large  in  the  aggregate,  as  appears  above,  still  barely  suffices  to 
malce  bank  capital  desirable  property.  In  January,  of  the  year  eighteen 
hundred  and  thirty-five,  the  then  bank  commissioners  reported  to  the 
Legislature,  that  "  the  average  dividends  of  all  the  banks,  during  the 
last  three  years,  had  been  7xV(j  P^r  cent,  the  year  on  the  invested  capi- 
tal." The  present  public  statements  required  periodically  from  the 
banks,  omit  the  amount  of  dividend  which  the  banks  pay  ;  but  no  reason 
exists  for  supposing  that  banking  is  more  profitable  than  it  was  at  the 
former  period ;  or  even  quite  so  profitable,  as  more  competition  exists 
than  exi-sted  then. 

Some  small  banks,  that  are  favorably  located,  and  conducted  with 
great  economy,  pay  annually  ten  per  cent,  in  dividends,  and  a  few  pay 
more ;  but  a  bank  that  pays  eight  per  cent,  the  year  will  contrast  favor- 
ably with  the  gpneral  average  of  banks  ;  while  the  ruin  which  occasionally 
overwhelms  banks,  absorbing  their  whole  capitals,  evinces  that  banking 
is  so  hazardous,  that  the  excess,  if  any,  of  bank  dividends  over  seven  per 
cent,  the  year,  the  legal  rate  of  interest,  is,  even  in  prosperous  banks, 
rarely  more  than  an  equivalent  for  the  hazards  incident  to  banking  ;  this, 
too,  after  we  include,  in  the  annual  dividend,  the  exemption  from  taxa- 
tion that  pertains  to  the  owners  of  bank  capital ;  the  taxes  being  all  paid 
by  the  bank.  We  are  yet  to  learn  whether  banking  will  continue  to  be 
desirable  by  capitalists,  when  it  shall,  next  year,  become  burthened  with 
the  additional  liability  contemplated  by  our  State's  new  constitution  ;  — 
the  addition  doubling  the  existing  liability  of  bank  stockholders,  and 
adding  no  new  remuneration  to  the  invested  capital.  The  morality, 
and,  perhaps,  the  constitutionality  of  the  law,  may  well  be  questioned, 
af  thus  adding  ex  post  facto  liabilities  to  preexisting  bank  stockholders  ; 
for  though  bank  charters  reserve  to  the  legislature  a  power  to  alter  char- 
ters, the  proposed  alteration  relates  not  to  the  charters,  but  to  the  owner- 
ship of  bank  stock. 

Benefits  to  the  Puhlic  from  the  Use  of  Bank  Notes.  —  vVe  shall,  however, 
possess  but  an  inadequate  appreciation  of  the  nature  of  bank  notes  and 
deposits,  if  we  estimate  them  by  cnly  their  lucrativeness  to  banks.  Tc 
so  insufficient  an  estimate  we  probably  owe  the.  prejudice  which  exists 


10  A    TREATISE    ON    BANKING. 

against  banks,  and  certainly  bank  notes  won  1  be  intolerable,  if  the  pub 
Ac  sustained,  without  an  «iuivalent,  the  hazards  incident  to  paper 
money.  By  the  publisher  bank  reports  of  December  last,  the  banks 
have  loaned  to  the  public,  on  priv^ate  and  public  securities,  ninety-twc 
millions  and  a  half  of  dollars,  while  the  banks  could  have  loaned  only 
about  forty-seven  millions  had  the  banks  not  been  assisted  by  the  use 
of  bank  notes  and  deposits.  The  excess  is  some  more  than  forty- 
five  millions  of  dollars.  Twenty-three  millions  of  this  is  composed 
of  bank  notes  ;  the  residue  is  composed  of  deposits.  But  as  we  desire  to 
estimate,  impartially,  the  merits  of  paper  money,  we  will  assume  that 
the  amount  of  bank  notes  loaned  was  only  twenty  millions  of  dollars  ; 
and  that  the  remaining  three  millions  of  them  was  represented  by 
specie,  which  the  bank  notes  had  taken  out  of  circulation  and  placed  in 
the  vaults  of  the  banks.  This  is  probably  accurate,  for  though  the 
banks  possessed,  last  December,  nearly  seven  millions  of  dollars  in 
specie,  yet  we  may  well  assume  that  a  rateable  portion  of  it  belonged  to 
the  deposits. 

Assuming,  then,  that  the  ability  to  create  bank  notes  naa  caused  the 
banks  to  increase  their  loans  twenty  millions  of  dollars,  me  public  are 
benefited  by  the  bank  notes  to  the  extent  that  the  use  of  twenty  millions 
of  money  exceeds  in  productiveness  the  interest  that  the  oanks  charge 
therefor.  That  the  productiveness  is  more  than  the  bank  interest,  is 
demonstrable  from  the  competition  that  exists  for  loans.  They  are  usu- 
ally deemed  favors  by  borrowers  who  can  give  for  them  tne  most  un- 
doubted security. 

Nor  is  the  benefit  which  accrues  from  the  employment  of  paper  money 
confined  to  the  borrower.  It  is  shared  variously  by  every  person 
amongst  whom  the  bank  notes  are  circulated  ;  for  wnoever  receives 
money  receives  it  in  exchange  for  his  labor  or  property  mat  he  values 
less  than  the  money  for  which  he  exchanges  it.  Conceive  now  the  ra- 
pidity with  which  money  passes  from  one  person  to  another,  (its  use 
being  too  costly  to  permit  any  person  to  retain  it  long  in  inactivity,)  and 
you  may  approximate,  remotely,  to  the  number  of  persons  who,  during 
any  one  year,  must  be  benefited  by  the  twenty  millions  ol  dollars  ;  and 
if  you  can  aggregate  during  ai>y  such  year  the  benefits  to  the  borrow- 
ers, and  the  innumerable  participants  as  above,  you  will  obtain  a 
glimpse  (greatly  inadequate  it  must  be)  of  the  merits  of  bank  notes 
irrespective  of  their  use  to  banks  as  a  means  of  banking  profits. 

Relative  Utility  to  the  Public  of  the  Safety  Fund  and  Free  Banks. —  Nor 
must  we  omit,  in  our  calculations  as  above,  that  the  twenty  millions  of 
loans  produced  by  the  use  of  bank  notes,  can  exist  by  no  other  means. 
Any  'egal  prohibition  of  bank  notes  would  compel  banks  to  reduce  theii 
loni)'--  tr  an  amount  equal  to  the  extinguished  bank  notes.     In  this  con- 


THK    BANK.  11 

nection,  we  may  contrast,  with  possibly  some  utility,  the  two  systems  of 
banking  which  are  struggling  foi  mastery  in  our  State;  if  the  struggle 
be  not  already  over  by  a  tacit  decision  in  favor  of  what  are  termed  the  free 
banks.  The  free  banks  can  issue  no  bank  notes  without  pledging  with 
the  Comptroller  an  equal  amount  of  the  public  stocks  of  this  State  ;  whilst 
the  safety  fund  banks  can  create  bank  notes  at  no  greater  expense  than 
the  cost  of  paper  and  printing.  The  free  banks,  therefore,  take  out  of 
circulation,  for  the  purchase  of  public  stocks,  as  much  money  as  they 
subsequently  are  able  to  return  in  bank  notes.*  That  this  theoretical 
view  is  not  essentially  different  from  the  actual  result  will  appear  by  the 
last  December  bank  reports.  Ninety  free  banks  exist  in  the  State,  ex- 
cluding the  free  banks  of  New  York,  Brooklyn,  Albany  and  Troy. 
These  ninety  banks  own  an  aggregate  capital  of  six  millions  and  a  lialf 
of  dollars.  The  capital  was  taken  from  the  community  in  which  the 
banks  are  situated,  and  the  banks  have  returned  it  back  in  "loans  and 
discounts  ;"  and  only  one  million  two  hundred  thousand  dollars  in  addi- 
tion. The  same  district  of  country  is  occupied  by  filly-one  safety  fund 
banks,  who  own  an  aggregate  capital  of  eight  millions  seven  hundred 
thousand  dollars.  This  sum  has  likewise  been  returned  in  "  loans  and 
discounts,"  with  seven  million  two  hundred  thousand  dollars  in  addition. 
If,  then,  the  above  safety  fund  banks  should  be  converted  into  free  banks. 
the  loans  to  the  public  would,  on  the  above  principles,  have  to  be  dimin- 
ished some  more  than  five  millions  of  dollars  ,  a  diminution  which 
exceeds  one  fifth  part  of  the  whole  existing  "  loans  and  discounts"  of 
both  the  safety  fund  and  free  banks  in  the  district  of  country  em 
braced  in  the  above  calculation  ;  —  namely,  the  whole  of  the  State,  with 
the  exception  of  New  York,  Brooklyn,  Albany  and  Troy.  The  country, 
thus  abridged  in  its  means  of  active  business,  would  receive  no  equiva- 
lent therefor  in  any  shape,  except  an  imagined  greater  securitv  against 
insolvent  bank  notes. 

Loss  to  the  Public  from  Insolvent  Bank  Notes.  — Legisl?<ion  on  the  sub- 
ject of  bank  notes  has  looked  only  to  the  evils  of  loss  from  insolvent 
banks.  This  evil  will  be  terminated  when  no  bank  notes  can  oe  cre- 
ated except  on  an  equivalent  pledge  of  public  stocks  ;  but  the  legis- 
lature ought  to  inquire  whether  the  remedy  is  not  worse  than  the  dis- 
ease. Possibly,  if  the  disease  be  estimated  by  practical  results  rather 
than  by  declamation,  (and  declamation  is  much  our  wont  in  this  par- 
ticular,) each  man  may  find,  on  reflection,  that  his  loss  from  insolvent 
bank  notes  has  been  small,  even  without  setting  off  against  it  the 
amount  that  he  has  been  benefited  by  solvent  bar^k  notes.     The  laboring 

*  Free  banks  can  now  issue  bank  notes  on  a  pledge  in  part  of  real  estate  ;  and 
notes  thus  issued  are  not  obnoxious  to  the  abo^e  difTiculty,  as  the  real  estate  re- 
mains in  the  possession  of  the  mortgagors  subject  to  its  accustomed  uses  to 
society. 


12  k    TREATISE    ON    BANKING. 

poor  are  the  persons  for  whom,  in  this  matter,  commiseration  is  u.>ua]ly 
most  eloquent ;  but  no  class  of  society  is  benefited  more  directly  by  an 
exuberant  currency  than  manual  laborers,  and  no  class  hazards  so  little 
by  its  dangers.  From  the  danger  which  attends  the  creation  of  paper 
money,  (the  danger  from  owning  bank  stock,)  the  laboring  poor  are 
necv;ssarily  exempt.  The  only  danger  to  which  a  poor  laborer  is  exposed 
is  the  casual  possession  of  an  insolvent  bank  note.  This  loss  we  falla- 
ciously magnify  by  saying,  that  the  loss  of  a  dollar,  when  it  constitutes 
the  whole  property  of  a  man,  is  relatively  as  great  a  loss  to  him  as  the 
loss  of  a  thousand  dollars  is  to  a  man  a  thousand  times  richer.  The 
fallacy  of  the  argument  becomes  manifest  when  we  estimate  the  respect- 
ive losses  by  the  respective  power  of  the  parties  to  reinstate  themselves 
as  they  stood  before  the  loss.  The  laboring  man  accomplishes  this  hv  » 
day's  labor,  while  the  richer  man  may  labor  a  year  and  not  accomplish 
a  like  result. 

The  Safety  Fund.  —  But  while  we  speak  in  favor  of  the  safety  fund 
banks,  we  would  not  be  understood  as  speaking  favorably  of  the  safety 
fund  principle  which  punishes  honest  bankers  for  the  frauds  of  the  d  s- 
honest.  It  is,  also,  vicious  in  its  tendency,  for  it  promises  inder.'.r.ify 
against  bank  insolvency,  and  thereby  prevents  the  scrutiny  cf  the  public 
into  the  conduct  of  bankers  ;  permitting  extravagance,  improvidence 
and  dishonesty,  to  unmolestedly  effect  their  ravages.  The  solvent 
banks  who  are  liable  to  the  safety  fund  have  paid  thereto  nearly  two 
millions  of  dollars  for  losses,  and  are  still  to  pay,  annually,  during  the 
continuance  of  their  charters,  the  half  of  one  per  cent,  on  their  respective 
capitals.  Of  this  immense  loss,  about  one  million  and  a  half  of  dollais 
accrued  from  banks  in  Buffalo,  of  whom  in  particular,  and  of  all  the  broken 
banks  in  a  great  degree,  may  be  affirmed,  that  if  they  had  been  iuiaide(i 
by  the  credit  of  the  safety  fund,  they  never  would  have  been  trusted 
sufficiently  to  much  injure  any  person.  And  could  the  money  abstracted 
by  their  agency  from  the  safety  fund  be  traced  to  the  real  beneficiaries, 
it  would  be  found  in  the  possession,  not  of  innocent  sufferers,  but 
mostly  of  accessories  to  the  frauds  and  mismanagements  by  which  the 
losses  to  the  safety  fund  v,'ere  produced 

Relative  Lucrativeness  to  Batik  Owners  of  the  Safety  Fund  and  Free 
Banks.  —  Having  thus  shown  how  our  existing  two  systems  of  banking 
act  respectively  on  society,  we  will  examine  how  they  compare  in  profits 
to  the  stockholders.  We  will  assume  that  the  free  banks  can  issue  no 
bank  notes  except  on  an  equivalent  pledge  of  State  six  per  cent,  slocks  ; 
F,nd  that  the  State  stocks  can  be  purchased  at  par.  The  legal  and 
attainable  interest  of  money  is  seven  per  cent.;  hence  the  free  banks 
\ose  one  per  cent,  the  year  on  ths  amount  of  all  their  bank  notes-    6oroe 


THE    BANK.  Id 

persons  may  say  that  the  difference  is  not  merely  the  excess  of  legal  in 
terest  over  the  six  per  cent,  received  on  the  State  stock,  but  the  excess  of 
what  the  hundred  dollars,  which  is  invested  in  State  stocks,  would  have 
earned  in  banking  —  say  eight  per  cent.;  and  thus  that  the  loss  in  pro- 
curing bank  notes  is  one  per  cent,  the  year  in  the  interest,  and  an  addi- 
tional one  per  cent,  in  privation  of  productiveness  ;  making  the  ''eal 
loss  two  per  cent,  the  year  on  the  amount  of  bank  notes.  We  will, 
however,  adopt  the  first  mode  of  computation,  and  call  the  loss  only  one 
per  cent.,  when  the  stocks  can  be  purchased  at  par. 

But  the  stocks  cannot  be  thus  purchased.  They  are  selling  at  a  pre- 
mium often  per  cent.,  which  makes  the  loss  of  interest  one  dollar  and 
seventy  cents  the  year  on  every  hundred  dollars  of  bank  notes,  with- 
out allowing  for  the  ultimate  loss  of  ten  per  cent,  on  the  stock,  when  it 
comes  to  be  paid  off  at  par  by  the  State.  "We  shall  not,  therefore,  be 
extravagant  in  assuming  that  the  free  banks  lose  one  and  three  quarters 
per  cent,  the  year  on  the  amount  of  their  bank  notes  ;  Avhile  the  safety 
fund  banks  create  bank  notes  without  any  loss,  except  the  half  per  cent. 
the  year  paid  on  their  aggregate  capitals  to  the  safety  fund,  and  now  a 
total  loss.  This  reduces  the  comparative  disadvantage  of  the  free  banks 
to  one  and  a  quarter  per  cent,  the  year  on  the  amount  of  their  capital 
invested  in  bank  notes.  By  the  published  bank  reports  of  last  Decem- 
ber, all  the  free  banks  of  the  State  (excluding  those  of  New  York  city) 
possessed  an  aggregate  capital  of  a  little  more  than  seven  millions  and 
a  half  of  dollars,  while  the  bank  notes  were  equal  to  that  sum  with  the 
exception  of  about  four  hundred  thousand  dollars ;  so  that  the  free 
banks  out  of  the  city  of  New  York  were  (so  far  as  our  hypothesis  is 
applicable  to  them)  banking  at  a  disadvantage,  as  compared  with  the 
safety  fund  banks,  of  one  and  a  quarter  per  cent,  the  year  on  nearly 
their  whole  capitals. 

Free  Banking  in  New  York.  —  The  free  banks  in  the  city  of  New  York 
are  differently  circumstanced.  Their  aggregated  capital,  in  Decen^^er 
1848,  was  $7,148,710,  while  their  bank  notes  amounted  to  only  Si, 745,- 
250.     In  the  city,  therefore,  the  free  banks  lose  annually  1|  per  cent. 

On  their  bank  notes  say $30,540 

And  gain,  by  exemption  fmm  the  safety  fund,  half  per  cent. 

the  year  on  their  capitals,  say 35,74^ 


Leaving  an  annual  balance  in  favor  of  free  banking  in  the 

city  of  New  York, $5,203 

besides  the  further  benefit  of  being  able  to  charge  seven  per  cent,  the 
year  interest  on  loans  of  sixty  days  and  under,  while  the  safety  fund 
banks  can  charge  only  six  per  cent.  This  source  of  benefit  is  enjoyed 
also  >'Y  th"  country  free  banks,  and,  to  the  extent  of  its  availability,  will 


14  A   TKEATISE    ON    BANKING. 

mitigate  the  assumed  loss  of  free  banking  in  the  country.  In  large  cities 
like  New  York,  the  difference  between  six  per  cent,  and  seven,  on  short 
loans,  must  produce  a  gain  to  the  free  banks  of  at  least  a  qnarter  of 
one  per  cent,  on  the  whole  of  their  bank  capital,  and,  possibly,  much 
more,  for  such  paper  is  abundant  in  cities.  If,  therefore,  we  credit  the 
free  banks  of  New  York  city  with  the  above  advantage,  in  addition  to 
the  advantage  already  shown  to  exist  in  their  favor,  we  shall  see  that 
in  the  city  free  banking  is  more  lucrative  than  safety  fund  bank- 
ing ;  burdened  as  the  latter  is  with  a  safety  fund  tax  of  a  half  of  one  per 
cent. 

If,  however,  the  free  banks  of  the  city  employ  a  smaller  amount  of 
bank  notes  in  loans  than  they  would  employ  if  they  could  create  bank 
notes  without  expense,  as  the  safety  fund  banks  create  them,  a  conse- 
quent loss  to  the  city  free  banks  must  be  estimated  before  we  can  settle 
accurately  the  relative  lucrativeness  in  the  city  of  the  two  systems  of 
banking;  but  banking  in  the  city  is  so  largely  transacted  on  deposits, 
that  the  amount  of  the  above  supposable  loss  is,  probably,  mnch  too 
small  to  counteract  the  preponderance  of  benefit  which  belongs  there  to 
the  free  banks. 

Relative  Effects  on  City  and  Country  Capitalists  of  the  Safety  Fund  and 
Free  Bank  Systems.  —  To  bank  stockholders,  therefore,  the  free  banlf 
system  is  rather  more  lucrative  in  New  York  city  than  the  safety  fund 
system  with  its  existing  burdens  ;  while,  in  other  parts  of  the  State,  the 
free  bank  system  is  less  lucrative  by  about  one  per  cent,  the  year  on  the 
invested  capital  than  the  safety  fund  system.  City  capitalists,  there- 
fore, possess,  in  the  business  of  banking,  an  advantage  over  rountrv 
capitalists. 

Relative  Effects  on  City  and  Country  Coinmerce  of  the  Safety  Fund  and 
Free  Bank  Systems.  —  Let  us  now  inquire  what  portion  belongs  to  the 
country  and  what  to  the  city  of  the  public  loss  which  will  result,  as  we 
have  shown,  when  no  bank  notes  can  be  created  except  on  an  equiva- 
lent pledge  of  public  stocks.  By  the  bank  statement  of  last  December, 
the  bank  loans  founded  on  bank  notes  are  about  thre'^  dollars  in 
the  country  to  every  one  dollar  in  the  city ;  so,  whatever  injury  ma}'  , 
result  from  the  extinguishment  of  safety  fund  bank  notes,  the  injury 
will  fall  on  the  country  in  the  proportion  of  three  dollars  on  the  country 
to  every  one  dollar  of  injury  on  the  city.  The  cust-mers  of  the  city 
banks  live  near  the  banks,  and,  consequently,  employ  but  few  bank 
notes;  —  checks  founded  on  deposits  being  substituted*  in  the  city,  for 
bank  notes,  in  nearly  all  business  transactions.  In  the  country,  the 
bank  borrowers  employ  the  borrowed  money  at  places  remote  from  the 
d'ng  bank,  and  must  use  bank  notes.     The  country   thetclon,  anO 


THE    BANK.  \5 

.he  city  are  interested  in  very  different  degrees  by  all  laws  whicl. 
abridge  the  free  itsue  of  hank  notes ;  but  should  the  legislature  prohibit 
oank  deposits,  except  on  a  pledge  by  banks  of  State  stocks,  the  law 
would  embarrass  the  business  of  the  city  beyond  its  embarrassment  tc 
the  country,  in  just  about  the  same  proportion  as  such  a  law,  in  relation 
to  bank  notes,  embarrasses  the  business  of  the  country  beyond  its  em- 
barrassment to  the  city. 

Different  Legal  Privileges  accorded  to  Different  Safety  Fund  Banks.  — 
Originally,  every  safety  fund  bank  was  permitted  to  issue  bank  notes  to 
three  times  the  amount  of  its  capital,  but  in  cities,  where  large  banks 
are  needed,  business  is  transacted  principally  by  means  of  deposits : 
hence  a  New  York  two  million  bank  soon  found  that  its  ability  to  issue 
six  millions  in  bank  notes  was  a  useless  privilege.  But  in  the  country 
where  banks  are  small,  in  accordance  with  the  small  pecuniary  abilit} 
of  countrj'  capitalists,  and  the  smallness  of  inland  dealings,  business  is 
transacted  principally  with  bank  notes  ;  hence  a  hundred  thousand  dollar 
country  bank  found  that  it  could,  occasionally,  employ  more  than  all  its 
allowable  issue  of  bank  notes.  From  this  development  of  practice,  the 
legislature  abrogated  the  useless  ratable  equality  that  existed  in  the 
allowable  issue  of  bank  notes,  and  permitted  a  two  million  bank  to  create 
only  twelve  hundred  thousand  dollars  of  bank  notes,  while  a  hundred 
thousand  dollar  bank  was  permitted  to  issue  a  hundred  and  fifty  thou- 
sand dollars  in  bank  notes.  The  bank  note  issues  of  intermediate  mag- 
nitudes of  capital  were  graduated  by  the  above  proportions.  The  advan- 
tage is  still  largely  on  the  side  of  the  two  million  bank,  for  the  legal 
limit  is  much  above  its  wants,  while  the  limit  on  the  small  bank  is  often 
a  practical  abridgment  of  its  business.  TKc  two  existing  two  million 
banks  of  New  York  had  together,  last  December,  only  four  hundred  and 
sixty  thousand  dollars  of  bank  notes  in  circulatioii ;  and  as  nothing  but 
their  own  wishes  prevented  them  from  issuing  more,  we  must  infer  that 
they  desired  no  greater  issue. 

Difference  in  the  Productiveness  of  Different  Magnitudes  of  Bank  Capital. 
—  The  existing  graduation  of  bank  notes  to  capital,  as  above  explained, 
is,  practically,  more  favorable  to  the  two  million  bank  than  to  the  hun 
dred  thousand  dollar  bank  ;  still,  when  we  compare  the  proportionate 
gains  ol  the  two  banks,  a  prepunderance  exists  usually  in  iavor  of  the 
hundred  thousand  dollar  bank.  Diflerent  locations  afford,  m«  doubt,  dif 
ferenl  degrees  of  facility  for  the  production  of  gain  in  banking,  as  ir 
other  operations  ;  yet,  independent  of  that  and  every  other  accidenta 
Qifference,  some  magnitudes  of  capital  seem  in  every  pkcc  to  be  natu 
lally  more  lucrative  than  other  magnitudes  in  the  same  place. 

To  invpstigate  the  source  of  the  above  differences,  and   to  determine 


IG  A   'lUEAnSE    ON    B/^7KINU. 

i7hat  magnitude  of  capital  yields  inherently  the  largest  annual  per  ccr»t- 
nge  of  gain,  would  involve  us  more  deeply  into  the  philosophy  of  banking 
than  is  necessary  to  our  present  design ;  and  we  have  introduced  the 
subject  only  to  excite  attention  to  it,  should  any  person  wish  to  investi- 
gate it  further. 

The  Currency.  —  On  the  ninth  of  December,  1848,  the  one  hundred  and 
eighty-four  banks  of  our  State  owed  individual  depositors  $29,205,332 
Their  bank  notes  in  circulation  amouuted  to   -         -         -         23,206,289 


Making  the  aggregate  of  indebtedness  payable  on  demand,  $52,411,621 
Of  which  aggregate  the  banks  had  loaned  on  public  and 
private  securities, 45,209,372 


Being  the  whole,  with  the  exception  of    -         -  -       $7,202,249 

This  seems  bold,  but  if  the  money  has  been  so  loaned  that  it  can  be 
recalled  by  the  banks  respectively,  as  fast  as  they  are  respectively  called 
on  to  pay  the  deposits  and  bank  notes,  the  apparent  boldness  will  sub- 
side The  banks  possess  another  reliance.  They  have  loaned  not  only 
the  above  deposits  and  bank  notes,  -  -  .  .  $45,209,372 
But  also  the  capitals  of  the  said  banks,  say  -        -        -  47,333,879 


Making  a  total  of  loans  on  public  and  private  securities  of  $92,548,251 
The  banks  are  therefore  safe  if  they  can  recall  enough  daily,  out  of 
the  above  enlarged  aggregate,  to  meet  the  daily  returning  bank  notes, 
and  the  daily  withdrawn  deposits.  This  theoretical  ability  of  the 
banks  is  strengthened  by  experience,  which  shows  that  the  aggregate 
amount  of  bank  deposits  and  bank  note  circulation  varies  but  compar- 
atively little  from  day  to  day,  and  even  from  month  to  month,  and  from 
year  to  year.  Bank  notes  are  continually  being  returned  to  banks  for 
payment,  but  they  are  continually  paid  out  again  as  money  •  so  deposits 
are  continually  being  drawn  out  by  depositors,  but  they  are  continually 
returned  as  new  deposits. 

The  Currency  of  the  State  is  a  sort  of  Measure  of  the  Business  of  the 
Staiti.  —  The  small  variation  in  our  State  from  month  to  month,  in  the 
aggregate  amount  of  bank  circulation  and  deposits,  evinces  that  the 
commerce  of  the  State  employs  a  given  amount  of  circulation  ana  de- 
posits. They  constitute  the  currency  of  the  State,  for  usually  the  other 
items  of  currency  (specie  and  foreign  bank  notes)  are  small  in  com- 
parative amount.  Commerce  cannot  ordinarily  expand  without  an  ex- 
pansion of  the  currency,  nor  can  either  contract  without  a  contraction 
of  the  other.     And  we  may  all  have  experienced,  that  business  is  more 


THli    BANK.  17 

usually  contractea  Irom  inability  to  obtain  currency,  than  currency  li* 
contracted  from  diminution  of  business.  A  proof  of  this  is  the  expan 
sion,  apparently  illimitable,  that  gradually  occurs  in  business  whenevci 
banks  become  able  to  expand  the  currency. 

The  Business  of  the  State  is  a  sort  of  Guarantee  to  Banks  for  the  Perma 
nence  of  a  given  amount  of  Currency.  —  The  connection  which  thus  exists 
between  business  and  currency  constitutes  a  practical  guarantee  to  the 
banks  that  their  bank  notes  will  not  all  be  suddenly  returned  for  pay 
ment,  nor  all  deposits  be  withdrawn.  But  for  this  guarantee  no  banker 
would  dare  to  issue  bank  notes  beyond  the  amount  of  his  specie  in  bank, 
or  to  lend  any  portion  of  the  money  that  he  holds  in  deposit.  If  we 
examine  the  magnitude  of  the  currency  of  our  State  when  money  is  said 
to  be  scarce,  and  compare  it  with  the  magnitude  that  exists  when 
money  is  said  to  be  abundant,  the  dilference  will  be  small,  and  thereby 
shows  that  the  guarantee  above  alluded  to  is  potent.  The  currency  will 
occasionally  suffer  a  diminution  ihat  may  distress  bankers  but  th; 
great  bulk  of  it  must  be  as  permanent  as  the  business  operations  ol 


A  Surplusage  of  Currency  can  never  exist  long.  —  Neither  bank  notes 
nor  bank  deposits  can  exist  long  in  excess,  for  some  persons  are  paying 
interest  for  them  to  the  banks  :  — for  example,  the  public,  last  Decem- 
ber, owed  the  banks  more  than  forty  millions  of  dollars,  beyond  the 
aggregate  of  all  the  deposits  and  bank  notes ;  consequently,  an  extin- 
guishment of  this  indebtedness  furnishes  a  use  for  all  existing  bank 
notes  and  deposits,  a  use  equal  to  say  seven  per  cent,  the  year  on  the 
whole  sum  ;  hence,  the  extinguishment  of  the  currency,  by  the  paymen: 
nf  bank  debts,  becomes  a  sort  of  safety  valve  through  M'hich  the  cur 
rency  vanishes  during  any  diminution  of  existing  business  pursuits 
"  Dust  thou  art,  and  unto  dust  shalt  thou  return,"  is  not  more  appli 
table  to  the  human  body  with  reference  to  the  earth,  than  to  bank  cur 
rency  with  reference  to  bank  loans.  The  currency  originates  with  bank 
icans,  and  by  the  repayment  of  the  loans  the  currency  becomes  extin- 
guished. "We  accordingly  find  that  when  business  is  technically  dull  — 
that  is,  when  men  cannot  use  currency  at  a  sufficient  profit  to  pay  the 
banks  seven  per  cent,  interest  thereon  for  short  loans,  the  aggregate  of 
bank  debts  diminishes  daily  by  voluntary  payments  from  bank  debt- 
ors. At  such  times  the  Bank  of  England  reduces  its  rate  of  interest ;  for 
though  no  existing  business  may  justify  the  payment  of  seven  per  cent, 
the  year,  on  short  loans,  for  the  use  of  currency,  business  may  exist  that 
will  justify  the  payment  of  six  per  cent.,  or  five,  or  four.  By  thus  pe- 
nodically  graduating  the  rate  of  bank  interest,  by  the  contemporaneous 
2* 


]S  A    TEIEATISE    ON    BANKING. 

irofitableness  of  the  employment  of  currency,  the  Bank  of  Englana 
■  eeps  its  aggregate  amount  of  loans  as  high  as  it  desires.* 

The  Extinguishment  of  Bank  Circulation  and  Deposits,  and  the  Exttn^ 
guishment  of  Debts  due  to  Banks,  preserve  a  pretty  Uniform  Equality.  — 
The  daily  payments  to  all  the  banks  of  the  State  come  naturally  to  be 
about  equal  in  amount  to  the  aggregate  daily  redemptions  of  bank  notes 
und  bank  deposits.  In  the  production  of  this  equality  the  banks  some- 
times act  compulsorily  on  the  public  ;  sometimes  the  public  act  com- 
pulsorily  on  the  banks.  When  bank  debtors  pay  voluntarily  their  bank 
-oans,  they  compulsorily  extinguish  bank  notes  or  bank  deposits  to  the 
extent  of  the  loans  paid ;  but  when  banks  exact  a  reduction  of  bank 
oans,  the  banks  compel  the  extinguishment  of  bank  notes  and  deposits 
o  the  extent  of  the  reduction.  Both  calculations  assume  that  the  bank 
cans  are  paid  not  with  specie,  but  with  bank  notes  or  deposits,  for 
specie  constitutes  too  small  a  portion  of  the  currency  of  the  State  to  vary 
much  the  general  calculation. 

Specie  Payments.  —  The  last  December  bank  reports  show  that  the 
oanks  of  the  State  owe,  in  circulation  and  deposits,  nearly  fifty -two  mil- 
ions  and  a  half  of  dollars,  payable  on  demand  in  specie ;  while  the 
specie  in  all  the  banks  is  not  quite  seven  millions  of  dollars.  To  an  in- 
experienced observer,  nothing  seems  wanting  to  the  destruction  of 
Danks  thus  circumstanced,  but  some  casual  run  on  them  for  specie.  In- 
deed, a  sort  of  vulgar  error  exists  in  relation  to  the  importance  of  specie 
to  the  currency  of  bank  notes,  and  even  to  the  ultimate  value  of  both 
bank  notes  and  bank  deposits.  Bad  indeed,  and  fallacious  indeed 
would  be  both  these,  if  their  currency  or  value  depended  on  the  amount 
of  specie  owned  by  the  banks  at  any  given  moment.  Of  the  fifty-two 
millions  in  bank  notes  and  deposits  due  from  the  banks  last  December, 
the  true  basis  of  their  value  was  the  ninety-two  millions  and  a  half  in 

*  Borrowers  may  often  be  found  for  money  when  the  loan  is  to  continue-  for 
several  months  ;  while  no  borrowers  may  be  willing  to  take  money  on  loans  for 
short  periods.  The  Bank  of  England  accordingly  extends  the  duration  of  its 
loans,  as  well  as  reduces  its  rates  of  interest,  when  borrowers  are  not  sufficient- 
ly numerous.  But  loans  for  short  periods  are  alone  desirahle  to  hanks,  for  a 
hank  knows  not  when  its  currency  may  return  for  redemption,  and  hence  can- 
not safely  loan  for  long  periods.  The  duration  of  bank  loans  comes  r.aturally  to 
he  graduated  by  the  time  that  ordinarily  intervenes  between  the  issue  of  cur- 
rency by  lianks,  anil  its  return  for  redemption  and  extinction.  The  period  of 
return  varies  with  difTcrent  employments  of  currency,  and  in  dilfernnt  locali- 
ties, but  the  period  is  rarely  so  long  as  to  enable  banks  to  extend  the  duration 
of  loans  beyond  a  few  months,  especially  with  the  facilities  which  exist  ncvr 
everywhere  for  the  return  of  bank  notes  to  the  bank  that  issued  them. 


THE    BANK,  ll> 

debts  due  to  the  banks,  which,  with  the  seven  millions  in  specie,  made 
together  ninety-nine  millions  and  a  half  of  dollars,  wherewith  to  pay  the 
fifty-two  millions  of  deposits  and  bank  notes.  For  all  purposes  of  solv- 
ency, the  banks,  therefore,  possessed  ninety-nine  millions  and  a  half  of 
specie,  —  seven  millions  of  it  in  the  vaults  of  the  banks,  and  ninety- 
two  millions  and  a  half  in  the  pockets  of  the  people. 

Specie  Suspensions.  —  But  as  the  fifty-two  millions  due  from  the  banks 
in  deposits  and  bank  notes  are  payable  on  demand,  while  the  ninety-two 
millions  due  to  the  banks  are  payable  in  daily  portions,  the  whole  not 
collectable  under  some  months,  the  banks  may  be  called  on  for  pay- 
ments faster  than  the  bank  debts  will  become  payable,  and  a  suspension 
of  specie  payments  may  ensue,  notwithstanding  the  assistance  which  the 
banks  will  derive  from  the  possession  of  seven  millions  in  specie  at 
the  commencement  of  the  struggle.  Our  State  has  experienced  ihiree 
such  suspensions,  but  no  abatement  of  avidity  by  the  public  was  pro- 
duced thereby,  in  the  desire  to  procure  bank  notes  and  bank  deposits. 
They  continued  as  valuable  as  ever  for  the  purposes  of  currency,  and 
were  less  valuable  than  specie  only  when  specie  was  wanted  for  some 
other  purpose  than  for  currency  within  our  State. 

Suspension  of  Specie  Payme7its  hy  a  Single  Solvent  Bank.  —  The  inhe- 
rent value  of  bank  notes  and  bank  deposits,  independently  of  their  con- 
vertibility on  demand  into  specie,  is  best  seen  when  a  single  solvent 
bank  suspends  specie  payments.  Within  a  circuit  of  country  occupied 
by  the  debtors  of  the  bank,  its  notes  and  deposits  will  continue  to  be 
current  as  long  as  the  debts  daily  becoming  due  to  the  bank  continue 
to  be  equal  in  amount  to  the  bank  notes  and  deposits  that  will  be  daily 
seekmg  redemption.  Suppose,  however,  that  the  debt  which  you  may 
owe  the  bank  will  not  become  payable  under  four  months,  still  notes 
and  deposits  to  the  amount  of  your  debt  will  possess  a  value  to  you 
equal  to  specie,  less  the  interest  for  the  four  months  ;  hence,  if  the 
bank  possesses  good  debts  equal  in  amount  to  its  notes  and  deposits, 
such  notes  and  deposits  can,  intrinsically,  depreciate  in  value  only  to 
the  amount  of  such  interest ;  nor  will  the  deposits  and  notes  depreciate 
intrinsically  to  that  extent,  if  the  bank  shall  be  sufficiently  solvent  to 
eventually  pay  its  notes  and  deposits  with  interest  superadded,  accord- 
ing to  the  requirement  of  law. 

Legal  Tender.  — The  Bank  of  England  suspended  specie  payments 
continuously  during  twenty  years,  and  its  notes  and  deposits  retained 
the  value  of  specie,  except  where  gold  and  =filver  were  needed  for  other 
purposes  than  domestic  currency.  Some  persons  attribute  the  result  to 
an  act  of  Parliament,  by  which  costs  could  not  be  recovered  in  a  lega 


20  A    TREATISE    ON    BANKING, 

prosecution  against  a  debtor  who  tendered  payment  in  notes  of  the  Bank 
of  England.  No  law,  however,  can  confer  a  value  on  insolvent  paper 
money,  except  as  the  law  may  act  on  preexisting  contracts. _  The  law 
may,  indeed,  forbid  you  from  refusing  to  receive  the  money  on  new 
contracts,  but  you  will  enter  into  none.  The  experiment  was  tried 
during  our  revolutionary  war,  and  it  was  tried  subsequently  by  France, 
but  prices  for  all  salable  property  increased  continually,  as  the  sup- 
posed actual  value  of  the  paper  decreased. 

Receivables  and  Treasury  Notes.  —  During  our  specie  suspension  of  the 
year  1814,  the  value  of  paper  money  was  well  illustrated  by  the  origina 
tion  of  a  new  species  of  bank  note,  which,  instead  of  promising  to  pay, 
promised  to  receive  the  note  in  all  bank  payments.  The  notes  were 
called  receivables,  and  they  circulated  as  readily  as  specie  in  the  vicin- 
ity of  the  issuing  bank,  so  long  as  the  bank  restricted  the  emission 
within  the  amount  needed  by  the  bank  debtors  of  the  vicinity.  The 
same  principle  is  apparent  in  the  treasury  notes  emitted  occasionally  by 
the  Federal  Government,  and  bearing  no  interest.  The  notes  are  receiv 
able  for  duties,  and  in  all  other  governmental  payments,  and  this  receiv 
ability  confers  a  specie  value  as  currency  on  such  notes,  to  the  amount 
of  several  millions  of  dollars  scattered  over  the  Union.  Occasionally 
the  notes  accumulate  m  New  York  faster  than  they  can  be  used  in  gov- 
ernmental payments,  and  then  they  sell  at  a  discount  which  is  graduated 
in  degree  by  the  time  that  will  elapse  before  the  notes  will  be  needed  in 
payments  to  government.  The  currency  of  such  treasury  notes,  despite 
their  inconvertibility  into  specie,  is  often  attributable  to  the  known  sol- 
vency of  the  government ;  but  no  considerations  are  necessary  to  the 
currency  of  the  notes,  but  a  consciousness  that  the  notes  will  imme- 
diately, or  shortly,  supply  a  use  for  which  specie  will  otherwise  be 
needed. 

A  National  Currency.  —  In  a  national  bank,  like  the  Bank  of  England, 
possessing  a  capital  of  many  millions  of  pounds  sterling,  invested  in 
short  loans  to  bankers  and  merchants,  and  the  recipient  of  all  the  gov- 
ernmental moneys  that  accrue  from  taxes,  duties,  excise,  &c.,  any  notes 
would  circulate  as  specie  that  the  banks  would  receive.  The  notes 
which  the  Bank  of  England  now  issues  being  payable  on  demand  in  spe- 
.^ie,  the  bank  is  compelled  to  subordinate  the  amount  of  its  bank  note 
currency,  an.l,  consequently,  the  amount  of  its  daily  loans,  to  the  acci 
dental  fluctuations  that  occur  in  the  demand  for  specie  ;  how  disastrously 
soever  the  subordination  may  affect  the  internal  commerce  of  the  king- 
dom. In  place  of  its  present  notes,  were  the  bank  to  substitute  a  cur 
rency  like  the  receivables  of  which  we  have  been  speaking,  gold  and 
oilver  could  be  exported  or  imported  according  to  the  requirements  of 


THE    BANK.  2! 

tommerce  without  any  consequent  derangement  of  business.  Such  a 
currency  would  be  as  expansible,  at  all  times,  as  the  business  require- 
inents  of  the  country ;  and  without  losing,  intrinsically,  its  ultimate 
specie  value,  since  every  debtor  of  the  bank  would  oe  holden  to  pay  his 
debt  in  specie,  to  the  extent  that  he  could  not  procure  the  notes  of  the 
bank.  The  ultimate  value  of  the  present  currency  is  connected  with 
specie,  by  means  of  an  ability  to  compel  the  bank  to  pay  specie  on  its 
lotes;  but,  in  the  other  currency,  the  ultimate  value  would  be  connected 
vnth  specie,  by  means  of  the  bank's  ability  to  compel  its  debtors  to  pay 
specie  on  their  bank  debts.  The  responsibility  of  procuring  specie  rests 
DOW  on  the  bank  ;  the  responsibility  in  the  other  system  would  rest  on 
the  bank's  debtors.  We  cannot,  however,  avoid  seeing  that  the  bank 
might  issue  so  large  an  amount  of  such  notes  that  an  excess  might  be 
occasionally  produced  beyond  the  quantity  that  could  be  kept  at  par 
value.  The  depreciation  might  be  illimitable  in  its  degree,  should  the 
bank  augment  inimitably  the  excess  of  currency.  Possibly,  therefore, 
the  power  to  create  such  a  currency  cannot  be  safely  committed  to  any 
institution ;  and  evils  less  radical  result  from  the  existing  sy.stem  of 
paper  money,  notwithstanding  its  sudden  contractions  on  a  foreign  de- 
mand for  specie,  than  would  result  from  any  different  system. 

Expansions  of  the  Bank  Note  Currency.  —  Having  thus  considered  the 
nature  of  paper  money,  we  will  proceed  to  consider  the  principles  by 
which  its  volume  is  regulated,  when  a  power  exists,  as  in  safety  fund 
banks,  to  expand  at  will  the  currency  within  a  given  limit.*  When 
country  products  sell  at  unusually  high  prices,  the  purchase  of  them 
employs  a  greater  amount  of  money  than  when  the  articles  sell  at  !ow 
prices.  High  prices  proceed,  usuallj-^,  from  some  extraordinary  demand 
for  the  appreciated  articles,  and  the  extraordinary  demand  increases  the 
number  of  the  purchasers,  and  the  frequency  of  sales  and  resales  ;  all 
consequences  which  augment  the  amount  of  money  that  purchasers  of 

*  This  expansibility  to  meet  the  wants  of  commerce  makes  the  safety  fund 
banks  more  useful  than  the  free  hanks.  As  relates  to  deposits,  both  banks  pos- 
sess an  equal  expansibility.  The  e.xpansibility  of  a  hank  note  currency  renders 
such  a  currency  better,  as  a  commercial  instrument,  than  a  currency  wholly  of 
specie,  whose  unexpansibility  would  constitute  a  great  practical  check  on  compe- 
tition and  on  enterprise  generally.  A  specie  currency  is  not,  however,  wholly 
unexpansible.  We  experienced  this  in  the  late  famine  in  Ireland.  Specie  was 
sent  from  England  to  purchase  our  breadstulTs,  but  an  expansibility  from  such 
a  source  is  slow  ;  and  it  can  occur  in  only  emergencies  of  international  com- 
merce, not  in  emergencies  of  domestic  commerce.  The  effect  of  paper  money 
on  prices  during  times  of  speculation,  we  will  not  discuss,  the  discussion  being 
not  necessary  to  our  design  ;  but  the  discussion  is  essential  to  a  proper  uuder- 
standii;g  of  the  utility  of  paper  money. 


22  A    TREATISE    ON    BANKING. 

produce  borrow  from  the  ba  iks.  Besides,  as  the  price  augments  of  any 
article,  the  area  enlarges  over  which  purchasers  extend  their  operations^ 
creating  thereby  new  applicants  for  bank  currency. 

The  Spirit  of  Speculatmi  is  Contagious.  —  Every  marketable  article  is 
subject  to  an  increased  action  like  the  above,  and  after  speculation  is 
aroused,  it  becomes  contagious,  so  that  speculators  multiply  fast ;  and 
though  the  original  purchasers  may  be  limited  to  wheat,  all  other  spe 
cies  of  grain  soon  become  added  thereto,  and  other  articles  of  a  differen* 
nature.  In  the  year  eighteen  hundred  and  thirty-seven,  every  man  and 
woman  became  infected  with  a  desire  for  the  unoccupied  lands  of  the 
United  States,  and  millions  of  dollars  in  bank  notes  were  borrowed  from 
banks  and  sent  to  Michigan,  Ohio,  Illinois,  and  other  places  where  the 
coveted  lands  were  situated.  City  and  village  lots  anywhere  soon 
were  purchased  with  like  avidity;  and  the  purchases  undergoing  an  in- 
cessant activity  of  sale  and  resale,  vast  amounts  of  new  currency  were 
Freated  for  the  occasion. 

Expansion  of  Bank  Deposits.  —  The  operations  which  produce  in  the 
country  an  expansion  of  the  bank  note  currency,  produce  in  cities  an 
expansion  of  bank  deposits.  These  became  accordingly,  in  1837,  as 
unusually  expanded  in  amount  as  bank  notes.  Banks  readily  encour- 
age expansions,  because  bank  profits  are  thereby  augmented ;  nearly 
every  dollar  of  the  increased  bank  notes  and  deposits  being  represented 
by  some  loan  made  on  interest  by  the  banks. 

Contraction  of  the  Currency.  —  The  currency  of  the  State  is  subject  to 
an  incessant  ebb  and  flow,  as  respects  the  amount  of  the  aggregate,  and 
as  respects  each  bank's  particular  share  thereof.  Our  State  possesses 
one  hundred  and  eighty-four  banks,  and  as  each  bank  is  a  sort  of  inde- 
pendent sovereignty,  each  guards  vigilantly  its  own  interests,  by  en- 
deavoring to  obtain  for  itself  as  many  deposits  as  it  can,  and  as  large 
a  share  as  it  can  of  the  aggregate  bank  note  circulation  of  the  State  j 
hence,  when  bank  A  receives  in  payments  or  deposits  notes  or  checks 
of  bank  B,  they  are  speedily  sent  to  bank  B  for  redemption.  By  this  pro- 
cess, bank  notes  and  bank  deposits  circulate  through  the  State,  as  blood 
circulates  through  the  human  body.  Every  bank  is  a  heart,  from  which  is 
continually  flowing  its  bank  notes  by  means  of  borrowers  and  depositors, 
who  act  as  arteries  to  distribute  the  bank  notes  through  all  ihe  business 
ramifications  of  the  State  ;  while  every  other  bank  is  a  vein,  that  is 
incessantly  absorbing  the  said  bank  notes,  and  returning  them  to  the 
bank  from  which  they  originally  emanated.  Some  of  the  notes  of  every 
bank  are  returned  to  it  through  the  agency  of  brokers,  who,  like  separ- 
ate and  peculiar  absorbents,  soak  up,  by  purchases  at  a  smal'  discount, 


THE    BANK. 


L'3 


bank  notes  which  .-.ave  been  casually  carried  out  of  their  proper  sphere 
of  action,  and  lliereby  become  a  sort  of  merchandise  more  or  less  de- 
preciated in  value,  as  the  notes  have  wandered  from  home,  and  lost  their 
properties  as  currency. 

Periodical  Contractions.  —  To  carry  further  the  analogy  between  tne 
circulatory  systems  of  banks  and  of  the  human  body,  banks  are,  as  well 
as  men,  subject  to  an  occasional  rush  of  blood  to  the  head.  The  dis- 
ease is  prevalent  with  banks  in  the  spring  and  fall.  Country  merchants 
resort  then  to  New  York  for  their  mercantile  supplies,  and  take  thither 
country  bank  notes  which  they  have  accumulated  from  their  customers 
and  debtors.  Every  merchant  draws  also  from  his  depositing  bank  all 
his  deposits,  and  borrows  from  the  banks  to  the  extent  that  loans  are 
attainable.  When  he  arrives  at  New  York,  any  part  of  his  money  that 
is  current  at  the  city  banks  soon  flows  thith«r ;  while  the  part  which  is 
uncurrent  flows  to  the  brokers ;  and  brokers  and  banks,  with  the  utmost 
speed*  of  railroads  and  steamboats,  send  the  country  money  home  for 
redemption. 

Pressure  Contraction.  —  The  contraction  just  referred  to  is  almost  pe- 
culiar to  inland  banks,  but  the  Atlantic  banks  are  subject  to  a  contrac- 
tion that  rarely  affects  extensively  the  interior.  This  contraction  is  con- 
sequent to  a  demand  for  specie  on  the  Atlantic  banks,  whether  the 
specie  is  to  be  exported  to  Europe,  or  paid  into  the  sub-treasury,  or  to 
be  used  for  any  other  purpose.  In  December,  1848,  the  banks  of  New 
York  city  possessed  less  than  six  millions  of  dollars  in  specie  ;  while 
they  were  liable  to  be  called  on  for  rather  more  than  twenty-seven  mil- 
lions in  payment  of  bank  notes  and  deposits,  besides  some  nine  mil- 
lions in  payment  of  debts  due  banks  and  other  corporations.  To  be 
thus  liable  was  not  peculiar  to  that  period.  The  position  then  may 
be  esteemed  something  better  than  a  fair  average  of  the  usual  condition 
of  the  city  banks.  Nor  is  the  position  bad,  as  the  banks  possess  a 
claim  on  their  debtors  to  the  amount  of  forty  millions  and  a  half  of  dol- 
lars in  discounted  notes  payable  daily,  and  nearly  all  becoming  due 
within  three  months ;  besides  some  seven  or  eight  millions  of  dollars 
in  other  securities. 

But  the  banks  are  liable  primarily,  and  if  specie  is  demanded  from 
them  to  the  extent  of  even  half  a  million  of  dollars,  the  banks  become 
sensitive  and  severally  endeavor  to  strengthen  themselves  by  refusing 

*  Speedy  redemptions  are  desired  hy  brokers  as  a  means  of  saving  interest 
on  the  money  which  ihey  employ.  The  country  money  that  is  received  by  the 
New  York  banks  is  paid  hy  the  country  banks  as  soon  as  it  is  received  in  New 
York,  for  the  New  York  banks  take  no  country  money  except  of  hanks  that 
keep  money  with  them  wherewith  to  redeem. 


24  A    TREATISE    ON    BANKING. 

to  lend,  and  by  exacting  payments  from  their  debtors.  Now,  as  all  Che 
current  money  of  the  city  is  composed  of  the  bank  notes  of  the  city 
banks,  and  of  deposits  in  the  said  banks,  all  the  loans  that  bank  A  can 
call  in  will  be  paid  in  some  of  the  aforesaid  currency  ;  consequently,  so 
far  as  the  payments  strengthen  bank  A,  they  impoverish  bank  C,  D  and 
E.  But  C,  D  and  E,  were  too  poor  already,  and  were  severally  endeav 
oring  to  strengthen  themselves,  the  same  as  bank  A  was  endeavoring  to 
strengthen  itself;  hence  C,  D  and  E,  will  call  on  their  debtors  more 
stringently  than  befo.  e,  and  their  efforts  will  impoverish  A  in  the  same 
way  as  the  efforts  of  A  impoverished  them. 

Panic.  — The  struggle  just  described  must,  as  it  proceeds,  increase  ia 
intensity  with  a  sort  of  compound  progression ;  and  as  each  bank,  in 
recalling  its  loans,  looks  only  to  its  own  safety,  each  bank  is  practically 
impoverishing  the  others  to  the  extent  of  its  power.  But  the  conse 
Quences  of  the  struggle  are  not  confined  to  the  banks.  The  currencj 
(bank  notes  and  deposits)  being  thus  suddenly  diminished  in  amount, 
by  the  payment  of  bank  debts,  enough  is  not  left  to  transact  the  usual 
business  in  the  community.  Money  is  said  to  become  scarce.  Property 
on  sale  cannot  be  readily  sold,  and,  with  the  diminution  in  the  numbei 
of  competing  purchasers,  prices  languish  and  fall.  Many  persons,  who 
have  depended  on  borrowing,  to  meet  accruing  engagements,  areunaois 
to  borrow,  and  are  compelled  to  suspend  payments.  In  this  category 
will  be  some  merchants  who  have  lived  expensively  in  the  most  costly 
parts  of  the  city,  and  been  deemed  rich  ;  though  actually  long  insolvent 
and  kept  from  bankruptcy  by  only  an  ability  to  pay  old  debts  by  con- 
tracting new  ones.  Still  they  have  been  deemed  as  safe  as  other  debt- 
ors, and  men  begin  to  query  whose  solvency  may  not  follow  next ;  es- 
pecially as  every  failure  involves  other  failures  of  indorsers  and  credit- 
ors. A  new  element,  panic,  is  introduced  into  the  pressure  ;  and  persons 
who  have  money  to  lend  keep  it  unemployed  until  the  storm  subsides  ; 
and  thus  the  last  resource  of  embarrassment,  the  resource  technically 
termed  "  the  street,"  where  notes  can  ordinarily  be  sold  at  a  usurious 
discount,  is  closed  against  the  needy,  except  at  rates  of  discount  so 
enhanced  by  avarice  and  fear,  as  to  engulf  nearly  the  whole  principal 
of  any  proposed  loan,  and  thus  to  defeat  the  motive  for  the  sacrifice. 

The  very  day-laborers,  journeymen-mechanics,  and  market-people, 
v,'\\l  sometimes  become  infected  with  the  panic,  and  add  to  the  genera, 
trouble  by  a  petty  nm  on  the  banks  for  specie,  in  liquidation  of  small 
deposits,  or  the  payment  of  small  bank  notes. 

The  Pressure  reaches  the  Interior.  —  "While  pressure  and  panic  thus 
ravage  the  metropolis,  the  banks  of  the  interior,  who  at  fiist  are  mere 
spectators  of  the  struggle,  begin  to  partake  of  the  metropolitan  distres>.s. 


THE    BANK.  25 

While  money  is  plenty  in  the  city,  a  portion  of  its  currency  consists  ot 
ihe  notes  of  country  banks,  which  are  emplo}ed  in  ordinary  occupa- 
tions to  avoid  the  expense  attendant  on  their  transmission  home  for 
payment ;  but  when  the  pressure  enhances  the  value  of  monc}',  country 
bank  notes  are  sold  to  the  brokers  in  unusual  quantities,  and  transmitted 
home  for  redemption.  Nor  is  this  the  only  intimation  to  country  banks 
of  the  commotion  in  the  city.  The  merchants  of  the  country  who  are 
indebted  to  the  city,  are  strongly  importuned  by  the  city  creditors  to 
make  speedy  or  even  anticipated  payments  ;  and  debts  already  due  can 
receive  no  further  postponements.  While  country  banks  are  weakened 
to  the  extent  that  these  requirements  are  complied  with,  the  resources 
of  the  country  banks  are  often  sadly  diminished,  in  these  moments  of 
unusual  need,  by  the  return  unpaid  of  many  New  York  acceptances,  on 
whose  payment  the  country  banks  have  relied  for  funds.  The  country 
banks  can  now  no  longer  furnish  loans,  but  begin  to  require  payment 
from  their  debtors ;  and  thus  bring  on,  in  the  country,  a  mutual 
struggle  of  bank  A  against  bank  B,  in  the  way  we  have  represented  the 
struggle  in  the  city. 

The  Pressure  and  Panic  Terminate. —  Every  pressure  in  New  York  w^ll 
not  rage  to  the  extent  we  have  described,  nor  will  every  city  pressure 
extend  into  the  country ;  but  when  a  pressure  is  commenced,  it  rarely 
is  arrested,  till  business  is  greatly  diminished,  and  comparatively  but 
little  currency  is  required  to  conduct  it.  Exportable  produce  in  the 
mean  time  becomes  so  reduced  in  price  that  it  may  be  exported  more 
advantageously  than  specie,  in  the  liquidation  of  foreign  balances.  Im- 
porters have  also  abridged  their  foreign  orders  in  accordance  with  tne 
diminished  prospects  of  a  profitable  trade.  Specie  is  no  longer  in  de- 
mand. The  banks  cease  from  urging  the  payment  of  bank  debts,  and 
gradually  begin  to  resume  the  process  of  lending.  Business  men  fore- 
see that  money  will  soon  become  abundant.  They  wish  to  purchase 
while  prices  remain  at  the  panic  and  pressure  standard.  All  entertain 
the  same  views.  Competition  revives,  prices  advance,  the  banks  lend 
freely  to  indemnify  themselves  in  profits  for  the  late  period  of  absti- 
nence. A  new  expansion  is  begun,  to  end,  at  some  future  day,  in 
another  contraction,  another  pressure,  and,  perhaps,  another  panic. 

The  Sale  of  Exchange.  -  Notes  of  the  New  York  city  banks  are,  in  all 
parts  of  the  State,  equal  in  value  to  specie,  by  reason  that  persons  in  all 
parts  are  debtors  to  the  city.  Indeed,  so  much  of  the  money  of  the 
State  is  required  for  uses  in  the  city,  that  country  banks  can  generally 
satisfy  any  demand  for  specie  by  a  payment  of  the  demand  in  bank 
notes  of  that  city,  or  in  a  check  upon  some  New  York  bank ;  so  that 
the  burden  of  maintaining  specie  payments  in  our  State  rests  wholly 
3 


26  A   TREATISE    ON    BANKING. 

on  the  banks  of  New  York.  Their  currency  is  the  standard  in  our 
State  of  par  value,  and  by  it  we  graduate  the  currencies  of  all  other 
places  in  the  State  and  out ;  just  as  the  longitude  of  places  is  eslimateii 
with  reference  to  the  distance  east  or  west  from  Washington.  Even 
during  the  various  suspensions  which  we  have  experienced  of  specie 
payments,  the  currency  of  New  York  city  banks  has  continued  to  be  the 
standard  of  par  value  ;  and  when  the  city  currency  has  been  less  valu- 
able than  specie,  the  specie  has  been  deemed  above  par,  instead  of 
the  currency  being  deemed  below  par.  People  are  often  willing  to 
allow  a  country  bank  a  premium  of  half  of  one  per  cent.,  and  some- 
times more,  for  a  draft  of  the  bank  on  New  York ;  especially,  as  every 
country  bank  will  receive,  in  payment  of  the  draft,  notes  of  remote 
banks,  on  which  the  holder  could  not  obtain  the  specie  without  much 
travel  and  expense.  The  draft  can  be  transmitted  by  mail,  and  its 
transmission,  by  any  mode  of  conveyance,  ii',  from  the  legal  nature  of 
negotiable  paper,  less  hazardous  than  the  transmission  of  bank  notes  ; 
to  say  nothing  of  the  exemption,  produced  by  the  draft,  from  the  expense 
which  attends  the  transportation  of  specie  in  large  amounts.  The  sell- 
ing of  drafts  on  New  York  becomes,  therefore,  one  of  the  regular  sources 
of  profit  to  country  banks,  as  well  as  of  convenience  to  men  of  business  ; 
and  every  country  bank  keeps  funds  there,  and  keeps  funds  in  Albany, 
Boston,  or  other  places,  for  the  purpose  of  sellmg  drafts  thereon  at  a  pre- 
mium, when  the  business  of  its  vicinity  makes  drafts  on  such  places 
desirable. 

Collections  within  the  State.  —  The  principle  which  makes  a  merchant 
at  Buffalo  purchase,  at  a  premium  of  one  per  cent.,  a  draft  on  New  York, 
will  make  a  merchant  of  New  York  sell,  at  a  discount  of  one  per  cent.,  a 
draft  which  he  may  own  payable  at  Buffalo.  Banks,  accordingly, 
charge  a  discount,  varying  in  magnitude  of  rate,  according  to  distance, 
and  other  circumstances,  when  they  give  money  to  any  person  on  drafts 
payable  at  remote  banks.  The  charge  is  intended  to  remunerate  the 
bank  for  its  expense  and  trouble  in  procuring  the  payment  of  such 
drafts.  The  discount  is,  however,  usually  given,  not  on  drafts  payable 
at  sight,  but  on  notes  and  drafts  payable  at  some  future  period  ;  the 
bank  charging  interest  for  the  unexpired  time,  and  discount  for  collect- 
ing  the  money  at  a  distant  place. 

Collections  out  of  the  State.  —  The  collections  just  described  are  usually 
but  a  small  source  of  profits.  Some  banks  refuse  the  business  wholly, 
but  the  banks  in  New  York  are  said  to  transac*.  such  business  largely, 
with  paper  payable  in  Philadelphia,  Baltimore,  Boston,  and  other  large 
cities  of  the  Union  and  of  Europe ;  a  description  of  paper  which  the 
commerce  of  New  York  makes  abundant   in   that  city.     In   loaning 


THE    BANK.  21 

money  on  such  paper,  banks  allow  nothing  to  the  holder  when  the  rate 
of  exchange  happens  lobe  in  favor  of  tlic  place  M'hcre  the  paper  is  pay 
able  ;  but  this  rule  is  not  applied  to  European  drafts,  on  which  the  dif- 
ference of  exchange  is  usually  large.  In  paper  on  Philadelphia  and 
other  large  cities  of  our  Union,  the  rate  of  exchange  is  generally  in 
favor  of  New  York  ;  hence  the  banks  of  New  York,  in  lending  money  on 
such  paper,  rarely  receive  any  benefit  from  the  rate  of  exchange,  excep 
as  they  may  charge  a  per  centage  for  collection  in  addition  to  the  inter- 
est on  the  money  loaned.  The  charge  for  difference  of  exchange 
between  any  two  commercial  cities  will  vary  naturally  at  different 
periods  ;  but  the  multitude  of  collecting  agencies  which  exist  keep  down 
the  charge  at  all  times  to  the  lowest  limit  of  reasonable  remuneration. 
Still  the  business  constitutes  one  of  the  phases  of  banking,  and  it 
completes  the  summary  that  we  have  proposed  to  make  of  bankiug 
operations 


PART    SECOND— THE    BANKER. 

The  Objects  of  Banking.  —  Correct  sentiments  beget  correct  conduct 
h  banker  ought,  therefore,  to  apprehend  correctly  the  objects  of  bank- 
ing. They  consist  in  making  pecuniary  gains  for  the  stockholders,  by 
(egal  operations.  The  business  is  eminently  beneficial  to  society ;  bul 
some  bankers  have  deemed  the  good  of  society  so  much  more  worthy  of 
regard  than  the  private  good  of  stockholders,  that  they  have  supposed 
all  loans  should  be  dispensed  with  direct  reference  to  the  beneficial 
effect  of  the  loans  on  society,  irrespective,  in  some  degree,  of  the  pecu- 
niary interests  of  the  dispensing  bank.  Such  a  banker  will  lend  to 
builders,  that  houses  or  ships  may  be  multiplied ;  to  manufacturers, 
that  useful  fabrics  may  be  increased ;  and  to  merchants,  that  goods  may 
be  seasonably  replenished.  He  deems  himself,  ex-officio,  the  patron  of 
all  interests  that  concern  his  neighborhood,  and  regulates  his  loans  to 
these  interests  by  the  urgency  of  their  necessities,  rather  than  by  the 
pecuniary  profits  of  the  operations  to  the  bank,  or  the  ability  of  the  bank 
to  sustain  such  demands.  The  late  Bank  of  the  United  States  is  a 
remarkable  illustration  of  these  errors.  Its  manager  seemed  to  believe 
that  his  duties  comprehended  the  equalization  of  foreign  and  domestic 
exchanges,  the  regulation  of  the  price  of  cotton,  the  upholding  of  State 
credit,  and  the  control,  in  some  particulars,  of  Congress  and  the  Tresi- 

dent: all  vicious  perversions  of  banking  to  an  imagined  paramount 

end.  When  we  perform  well  the  direct  duties  of  our  station,  we  need 
not  curiously  trouble  ourselves  to  effect,  indirectly,  some  remote  duty 
Results  belong  to  Providence,  and  by  the  natural  catenation  of  events, 
(a  system  admirably  adapted  to  our  restricted  foresight,)  a  man  can 
usually  in  no  way  so  efficiently  promote  the  general  welfare,  as  by  vigi- 
lantly guarding  the  peculiar  interest  committed  to  his  care.  If,  for 
instance,  his  bank  is  situated  in  a  region  dependent  for  its  prosperity  on 
ihe  business  of  lumbering,  the  dealers  in  lumber  will  naturally  consti- 
tute his  most  profitable  customers  :  hence,  in  promoting  his  own  interest 
out  of  their  wants,  he  will,  legitimately,  benefit  them  as  well  as  him- 
self; and  benefit  them  more  permanently  than  by  a  vicious  subordination 
of  his  interests  to  theirs.  Men  will  not  engage  permanently  in  any 
busmess  that  is  not  pecuniarily  beneficial  to  them  personally  ;  hence,  a 
banker  becomes  recreant  to  even  the  manufacturing  and  other  interests 


THE    BAXKKR.  «S 

that  he  would  protect,  if  he  so  manage  his  bank  as  to  make  lis  stock- 
holders unwilling  to  continue  the  employment  of  their  capital  in  bank- 
ing.  This  principle,  also,  is  illustrated  by  the  late  United  States  Bank,  for 
the  stupendous  temporary  injuries  which  its  mismanagement  inllicted 
on  society  are  a  smaller  evil  than  the  permanent  barrier  its  mis- 
management has  probably  produced  against  the  creation  of  any  similar 
institution. 

The  Pecuniary  Prosperity  of  his  Bank  should  constitute  the  Primary  Object 
of  the.  Banker.  —  From  the  foregoing  remarks  we  infer,  that  the  honor 
and  pecuniary  prosperity  of  his  bank  should  constitute  the  paramount 
motive  of  every  banKmg  operation.  A  violation  of  this  principle  pro- 
duced, in  the  year  eighteen  hundred  and  thirty-seven,  a  suspension  of 
specie  payments,  which  was  visited  on  bank  stockholders  by  a  legisla- 
tive prohibition  of  dividends,  and  visited  on  banks  and  bankers  by  a 
general  obloquy.  The  banks  suspended  that  the  debtors  of  the  bank 
might  not  suspend :  or  worse,  the  banks  suspended  that  the  debtors 
might  be  spared  the  pecuniary  loss  that  would  have  resulted  from  pay- 
ing their  bank  debts.  A  conduct  so  suicidal  was  probably  fostered  by 
ihe  pernicious  union,  in  one  person,  of  bank  director  and  bank  debtor; 
a  union  from  which  our  banks  are  never  wholly  exempt ;  nor  are  thej 
always  exempt  from  the  same  union  still  more  pernicious,  in  bank 
presidents  and  cashiers.  With  this  inherent  defect  in  the  organization 
of  our  banks,  we  can  the  more  readily  understand  why,  in  1837,  the 
banks  assumed  dishonor  to  shield  their  debtors,  and  why  the  dishonor 
was  continued  for  some  more  than  a  year  in  our  State,  and  longer  in 
others ;  and  would  have  continued  longer  in  ours,  but  from  a  refusal 
of  its  further  tolerance  by  the  legislature. 

The  said  defect  produced  each  of  the  three  specie  suspensions  which 
the  banks  of  our  State  have  suffered.  As  a  prelude  to  each  suspension, 
the  Atlantic  cities  held  enthusiastic  public  meetings,  in  which  suspen- 
sion was  recommended  to  the  banks ;  and  the  recommendation  enforced 
by  the  assurance  that  the  meetings  would  sustain  the  banks  in  assum- 
ing a  suspended  position: — What  a  farce!  What  a  "thimble-rig!" 
Such  meetings  were  composed  of  bank  debtors,  (many  of  them  being  bank 
directors,)  and  meant,  substantially,  —  suspend  payments  that  }'ou  may 
leave  in  our  possession  the  money  that  we  owe  you ;  —  assume  dishonor 
that  we  may  remain  honorable. 

Specie  Suspensions  are  never  necessary  to  Banks.  —  Every  suspension  ot 
specie  payments  might  have  been  prevented,  had  the  bankers  performed 
their  duty  to  their  respective  banks,  by  prudence  in  the  qi  ality  of  their 
loans,  and  vigor  in  the  enforcement  of  payments.  No  proof  of  this 
can  be  more  convincing  than  the  successfully  sustained  refusal  of  .the 
3* 


30  -4-    TREATISE    ON    BANKING. 

Union  Bank  cf  New  York  to  unite  in  the  specie  suspension  if  the 
year  eighteen  hundred  and  thirteen.  All  the  banks,  also,  of  New  Eng- 
land preserved  specie  payments.  We  admit  that,  had  all  the  banks  of 
the  Union  refused  to  suspend  payments  in  181.3,  1819  and  1837,  busi- 
ness would  have  severely  suffered ;  but  this  is  a  consideration  for  the 
legislature,  and  not  for  the  banks.  They  are  creations  of  the  law,  and 
should  obey  their  creator.  In  England,  during  its  struggle  with  Napo- 
leon, the  government  prohibited  specie  payments  by  the  Bank  of  Eng- 
land, when  the  suspension  was  deemed  publicly  useful.  The  suspension 
continued  for  twenty  years,  but  the  bank  incurred  thereby  no  disgrace, 
for  it  obeyed  the  law. 

The  Interests  of  Debtors  mid  Dealers  should  be  subordinated  to  the  Interests 
of  the  Bank.  —  The  subordination  of  the  honor  and  interests  of  a  bank  to 
the  avarice  or  necessities  of  its  managers,  or  dealers  of  any  description, 
is  productive,  not  of  suspensions  only,  but  of  every  disaster  which  usu- 
ally befalls  banks  ;  and  unless  such  a  subordination  can  be  prevented 
by  the  officer  who  acts  specially  as  banker,  no  man  who  respects  him- 
self should  continue  in  the  position,  when  he  discovers  that  such  a  sub- 
ordination is  in  progress.  The  owner  of  a  steam  engine  regulates  its 
business  by  the  capacity  of  his  engine,  but  should  he  regulate  it  by  the 
necessities  of  his  customers,  he  would  probably  burst  his  boiler.  A  ship- 
owner regulates  his  freight  by  the  tonnage  of  his  ship  ;  a  contrary  course 
would  sink  it.  So  every  bank  possesses  a  definite  capacity  for  expan- 
sion by  which  bank  dealers  can  regulate  their  business ;  but,  when  a 
bank  regulates  its  expansion  by  the  wants  of  its  dealers,  or  the  persua- 
sions of  friendship,  it  will  probably  explode,  or  be  otherwise  unprofitable 
to  its  stockholders. 

Security.  —  Banks  charge  for  the  use  of  money  no  more  than  the  use 
is  worth.  Nothing  is  added  for  risk,  and  thereby  money-lending  diffeis 
from  all  other  business  that  involves  hazard.  A  great  disproportion 
exists  also  between  the  amount  hazarded  by  any  loan,  and  the  amount 
gained.  The  loan  of  a  thousand  dollars  for  sixty  days  involves  the  pos- 
sible loss  of  a  thousand  dollars,  without  the  possibility  of  a  greater  gain 
than  some  ten  dollars.  Banks,  therefore,  never  regularly  lend  money 
without  receiving  the  security  of  more  than  one  person  who  is  deemed 
safe  for  the  debt ;  and  a  good  banker  will  err  on  the  side  of  exces- 
sive security,  rather  than  accept  security  whose  sufficiency  may 
reasonably  be  questioned.  In  the  country,  two  endorsers  are  usually 
required  on  every  note  that  is  discounted  ;  but  in  cities,  where  discounts 
are  made  for  shorter  periods  than  in  the  country,  one  endorser  's  mere 
usual  than  two. 


THE    BANKER.  31 

Moral  Security.  —  Independently  of  the  wealth  of  the  endorser,  the 
oauks  derive  from  him  a  security  founded  on  the  natural  desire  cf  every 
borrower  to  protect  his  friends,  should  insolvency  occur  to  the  borrower 
durmg  the  pendency  of  the  bank  loan.  An  endorser  will,  also,  usually 
foresee  earlier  than  the  bank  when  mischances  threaten  the  borrower, 
and  when  appeals  for  protection  should  be  made.  To  derive  these  bene- 
fits from  endorsers,  they  should  be  disconnected  in  business  from  the 
borrower,  so  as  not  to  be  involved  in  his  calamities  ;  hence,  such  discon- 
nection is  always  one  of  the  circumstances  from  which  a  banker  judges 
of  the  sufficiency  of  any  proffered  endorser.  Relationship  of  either  con- 
sanguinity or  affinity,  between  a  debtor  and  his  sureties,  sharpens  usu- 
ally the  desire  of  the  debtor  to  protect  his  endorser ;  while  again  such 
relationship  facilitates  the  concealment  of  a  common  pecuniary  intere:it 
in  enterprises,  and  facilitates  collusions  against  the  bank  in  times  of 
disaster,  that  may  more  than  counterbalance  the  benefits  expected  by 
the  bank  from  the  relationship. 

Security  founded  on  the  Morality  of  a  Debtor.  —  The  more  lax  the  mo- 
rality is  of  a  borrower,  the  less  will  he  probably  feel  the  obligation  to 
protect  his  endorsers  ;  and  the  more  lax  the  morality  is  of  an  endorser, 
the  more  will  he  struggle  against  the  surrender  of  his  property  to  pay 
an  unprotected  endorsement.  As  a  general  result,  however,  debts  are 
rarely  collectable  from  the  property  of  an  endorser,  unless  his  property 
very  greatly  overbalances  the  amount  of  his  endorsement.  Instances  are 
continually  occurring  where  an  endorser  who  is  become  liable  for  a  bad 
debt,  which  his  property  could  pay,  and  leave  him  a  surplus,  will  ruin 
himself  in  successfully  preventing  the  application  of  his  property  to  the 
debt  in  question.  Hence,  when  a  debt  is  contracted  wholly  on  the  prop- 
erty of  the  endorser,  the  debt  will  not  be  safe  unless  it  is  small  in  com- 
parison with  the  wealth  of  the  endorser. 

Security  founded  on  the  Habits  of  a  Debtor.  —  Men  who  are  prone  to 
extravagance  in  their  domestic  or  personal  expenditures  rarely  possess 
the  amount  of  projierty  they  are  reputed  to  possess.  Men  expend  to  be 
thought  rich  more  frequently  than  they  expend  by  reason  of  being  rich. 
The  rich  are  usually  more  inclined  to  parsimony  than  expenditure.  Any 
way,  persons  who  practise  parsimony  are  in  the  way  of  becoming  rich, 
whatever  may  be  their  present  poverty  ;  while  persons  who  are  profuse 
in  expenditures  are  in  the  way  of  becoming  poor,  though  they  may  pos- 
sess a  present  opulence. 

Security  founded  on  the  Nature  of  a  Man's  Business.  —  A  man  who 
transacts  a  regular  Dusiness  in  a  regular  way  is  not  liable  to  sudden 
fluctuations  in  his  pecuniary  solvency ;  but  when  a  man's  business  is 


32  A    TREATISE    ON    BANKING, 

novel,  and  its  results  are  untried,  —  or  when  its  results  are  frequently 
disastrous,  tlie  banker  who  grants  him  loans  assuues  some  of  the  hazards 
and  uncertainties  of  the  business. 

Security  founded  on  the  Application  of  the  Loan.  —  When  money  is  to 
be  invested  in  the  purchase  of  merchandise,  cattb,  Qour,  or  other  prop- 
erty in  the  regular  course  of  the  borrower's  business,  the  investment 
yields  to  the  borrower  a  means  of  repayment ;  nothing  is  hazarded  but 
ordinary  integrity,  and  ordinary  exemption  from  disasters ;  but  when 
the  borrowed  money  is  to  pay  some  preexisting  debt,  none  of  the  fore- 
going securities  apply,  and,  possibly,  you  are  merely  taking  a  thorn  out 
of  another  person's  side,  to  place  it  in  your  own. 

Securiti/  founded  on  the  Character  of  the  Paper  that  is  to  be  Discounted. 
—  Notes  which  a  mnn  receives,  on  the  sale  of  property  in  his  ordinary 
business,  are  termed  business  notes.  The  owner,  having  received  them 
as  money,  had  satisfied  himself  of  their  safety ;  hence,  when  they  are 
offered  to  a  banker  by  a  prudent  man  of  business,  they  possess  an  inhe- 
rent evidence  of  value.  They  were  given  also  fcr  property  that  will,  in 
the  ordinary  course  of  business,  furnish  the  means  by  which  the  notes 
may  be  paid;  and  thus  they  possess  an  additional  ingredient  of  safety. 
Kindred  to  such  notes  are  drafts  which  a  man  draws  on  a  consignee  to 
whom  property  has  been  forwarded  for  sale.  If  the  consignee  be  a  pru- 
dent man,  (the  consignor  must  deem  him  prudent  or  he  would  not  trust 
to  him  the  property,)  he  will  not  accept  unless  the  property  forwarded 
is  equivalent  in  value  to  the  amount  of  the  acceptance.  The  property, 
therefore,  will  pay  the  acceptance,  and  while  the  property  remains 
unsold,  it  constitutes  an  equitable  pledge  for  ultimate  payment.  A 
country  banker,  however,  will  usually  be  benefited,  in  a  long  course  of 
business,  by  never  loaning  on  city  names  without  a  reliable  country 
endorser  or  maker,  or  both  ;  for  nothing  is  usually  more  unreliable  than 
the  reputed  solvency  of  the  merchants  of  large  cities. 

Acceptances  in  Ad-vance  of  Cmisig?iments.  —  A  factor  will  sometimes 
accept  in  confidence  that  the  drawer  will  supply  him  with  funds  in  time 
to  pay  the  acceptance.  This  will  not  constitute  a  worse  security  than 
an  ordinary  accommodation  endorsement ;  but  the  transaction  lacks  the 
reliability  and  security  that  are  consequent  to  the  acceptor's  possession 
of  consignments  in  advance  of  his  acceptance,  and  so  far  as  the  nature 
of  the  acceptance  is  concealed,  the  ostensible  character  of  the  paper  will 
give  it  a  fictitious  security. 

Assimilated  Notes  and  Acceptances.  —  Notes  and  acceptances  are  often 
"ssimilatcd  to  the  foregoing  character  to  facilitate  the  procurement  of 


THE    BANKER.  o3 

loans.  Two  merchants  will  exchange  notes,  and  offer  each  other's 
notes  at  different  banks,  as  business  paper.  Such  notes  are  peculiarly 
hazardous  by  reason  that  the  insolvency  of  either  of  the  parties  will 
usually  produce  the  insolvency  of  the  other.  Acceptances  are  exchanged 
in  the  same  way,  and  possess  the  same  element  of  danger. 

Kiting.  —  Sometimes  a  country  merchant  will  draw  on  a  merchant 
of  New  York,  and  obtain  thereon  a  discount  at  some  country  bank. 
The  draft  will  have  some  months  to  run  before  it  will  become  payable  ; 
but  when  it  is  payable,  the  New  York  merchant  will  obtain  the  means  of 
payment  by  drawing  on  the  country  merchant,  payable  some  months 
thereafter,  and  getting  a  discount  thereon  in  New  York.  Such  trans- 
actions are  termed  "kiting."  They  are  practised  on  notes  as  well  as 
on  drafts  ;  and  by  persons  residing  in  the  same  place  as  well  as  at  dis- 
tant places.  When  practised  by  persons  who  live  at  a  distance  from 
each  other,  the  operation  is  usually  very  expensive,  by  incidental 
charges  of  excliange  and  collection.  Bankers  should  suspect  the  solv- 
ency of  parties  who  resort  to  expedients  so  commercially  disreputable. 
The  real  character  of  the  transactions  is  rarely  avowed  by  the  parties 
inculpated  in  the  practices  ;  but  a  vigilant  banker  will  soon  suspect 
the  operations,  and  not  touch  them,  unless  the  security  can  be  made 
very  ample. 

Dummies.  —  A  country  produce  dealer,  or  manufacturer,  will  some 
times  place  in  New  York  an  agent  on  whom  to  draw  ;  or  he  may  con 
nect  his  operations  with  some  person  there  of  no  capital,  whom  he  will 
use  as  an  acceptor.  Such  acceptances  are  no  better  than  the  note  of  the 
country  dealer.  They  constitute,  moreover,  a  hazardous  class  of 
paper,  as  you  may  rely  somewhat  on  an  assumed  capital  in  the  ac- 
ceptors. Such  methods  are  rarely  practised  except  by  persons  who 
want  to  extend  their  operations  beyond  a  limit  to  which  a  real  consignee 
would  restrict  them.  No  prudential  limit  exists  with  the  dummy  ac- 
ceptor, hence,  the  drawer  is  able  to  carry  his  operations  to  an  extent 
unlimited,  except  by  his  own  will,  or  his  ability  to  find  lenders ;  and  men 
thus  predisposed,  and  supplied  with  the  requisite  machinery,  usually 
extend  their  speculations  till  they  are  overwhelmed  in  ruin. 

Void  Notes  and  Drafts.  —  Notes  and  drafts  are  often  made  to  be  sold 
at  a  usurious  discount,  by  parties  ostensibly  solvent,  but  who  are 
struggling  to  purchase  a  transient  respite  from  bankruptcy,  or  to  amend 
their  fortunes  by  desperate  enterprises.  Banks  are,  therefore,  usually 
reluctant  to  discount  paper  offered  by  brokers  and  other  persons  who 
are  known  to  practise  usury ;  for  such  paper  is,  by  existing  laws,  voio. 
as  against  makers  and  endorsers,  in  the  hands  of  even  an  unconsciou*? 


34  A    TREATISE    ON    BANKING. 

holder.     In  New  York  the  defence  of  usury  is  said  lo  be  so  discret 
itable    tliat    few   men    will   avail   themselv^es   of  it.      In    the   country 
people  feel  kss  fastidious   in  this  respect,    and  any  debt    which  can 
certainly  be   avoided  by  means   of  usury   w^ould   be   very  apt  to  be 
nncoLxtable. 

Of  Gains.  —  But  the  avoidance  of  loss  is  only  a  negation  of  evil. 
To  make  gains  is  the  proper  business  of  a  banker,  and  as  the  principal 
source  of  legitimate  gain  is  lending  money,  the  bank  must  lend  to  the 
extent  of  its  ability  —  erring  on  the  side  of  repletion,  rather  than  of  inan- 
ition ;  for  a  banker  knows  not  how  far  his  bank  can  bear  extension  till 
he  tries ;  —  hence,  if  timidity,  indolence,  or  apathy,  limits  his  loans  in 
advance  of  necessity,  he  may  injure  the  community  by  unnecessarily 
withholding  pecuniary  assistance,  and  injure  the  stockholders  by  unnec- 
essarily abridging  the  profits.  A  banker  must  not,  however,  extend 
his  loans  regardless  of  the  future,  but,  like  a  skilful  mariner,  he  should 
see  an  ajiproaching  storm  while  it  is  an  incipient  breeze,  and  meanwhile 
carry  all  the  sail  that  will  not  jeopard  the  safety  of  his  charge  :  —  gov- 
erning his  discounts,  at  all  times,  more  by  the  condition  of  his  funds, 
and  his  own  prospective  resources,  than  by  any  reputed  scarcity  oi 
abundance  of  money  in  other  places  and  in  other  banks. 

When  to  he  Moderate.  —  If  a  banker  can  make  reasonably  good  profits 
on  his  capital  without  much  expansion,  he  may  keep  more  restricted 
in  his  loans  than  a  banker  should  who  is  less  favorably  circumstanced. 
Every  banker  must,  however,  remember,  that  to  be  strong  in  funds  and 
rich  in  profits  are  natural  incompatibilities  ;  hence,  the  more  money  a 
banker  wishes  to  make,  the  poorer  in  funds  he  must  consent  to  become. 
In  banking  operations,  as  in  most  other,  wisdom  lies  in  a  medium  be- 
tween extremes ;  and  if  a  banker  can  keep  funds  enough  for  practical 
safety,  he  had  better  forego  excess  of  funds,  and  receive  an  equivalent 
in  gains.  Physicians  say  that  the  human  body  can  bear  excess  of  food 
better  than  deficiency.  The  excess  can  be  discharged  by  cutaneous 
eruptions,  as  we  see  sometimes  in  over-fed  infants  ;  but  deficiency  of 
nourishment  will  not  relieve  itself;  so  in  banking,  a  repletion  of  loans, 
if  they  are  undoubtedly  solvent,  prompt  and  short,  will  soon  of  them- 
selves work  a  relief  to  the  bank  ;  but  a  paucity  of  loans  cannot,  by  any 
process  of  its  own,  cure  the  scant  profits  of  the  stockholders.  Banks  are 
rarely  injured,  therefore,  by  an  excess  of  discounts.  When  banks  fail, 
their  disaster  proceeds  from  the  quality  of  their  loans,  not  from  the 
quantity. 

The  Kind  of  Paper  that  a  Banker  should  Prefer.  — '^o  banker  shoulJ 
feep  his  funds  inactive  when  no  l)etter  excuse  exists  therefor  than  that 


THE    BANKER.  35 

the  busiurss  he  can  obtain  is  not  so  lucrative  as  the  business  of  some 
otlier  place,  or  as  his  own  business  was  at  some  other  period.  The 
legal  rate  of  interest  is  so  high,  that  the  voluntary  forbearance  of  its 
reception  for  even  a  short  period,  is  ordinarily  a  greater  evil  than  the 
reception  of  any  common  description  of  solvent  loans.  Any  way,  a 
banker  who  keeps  his  funds  inactive,  to  await  the  ofl'er  of  loans  more 
lucrative  than  simply  the  interest  of  money,  should  be  well  assured  that 
the  future  loans  will  be  sufficiently  lucrative  to  compensate  for  the  for- 
bearance. But  no  disadvantages  of  position  must  be  deemed  a  sufficient 
apology  for  the  assumption  of  hazardous  loans.  When  no  safe  business 
offers,  no  business  should  be  transacted  by  a  banker  who  entertains  a 
proper  respect  for  himself,  or  a  proper  feeling  for  his  stockholders. 
Gains  may  be  impossible,  but  losses  are  measurably  avoidable.  If  any 
location  presents  the  alternative  of  no  business,  or  great  hazards,  a 
banker  is  accountable  for  the  choice  which  he  may  make  between  the 
two  alternatives ;  and  he  is  accountable  no  further. 

ISelechon  of  Loans  fowided  on  hicidental  Circulation  and  Deposits.  —  But 
ordinarily  every  banker  is  presented  with  more  business  than  he  can 
assume,  and  he  is  enabled  to  select  the  more  profitable  and  reject  the 
.ess  profitable.  In  speaking  of  the  profits  of  banking  we  mean  gains  that 
proceed  from  some  other  source  than  the  interest  allowed  by  law  for  the 
use  of  the  money.  These  gains  are  derived  most  largely  from  circulation 
and  deposits ;  hence  the  loans  are  advantageous  to  a  bank,  in  propor- 
tion as  they  increase  the  circulation  or  deposits  of  the  bank.  Money  is 
sometimes  borrowed  to  pay  debts  to  a  neighboring  bank,  or  to  a  person 
who  keeps  his  money  deposited  in  a  neighboring  bank.  Such  loans  yield 
no  profit  to  the  lender  except  the  interest  on  the  loan  ;  hence  they  are 
not  so  profitable  as  loans  to  borrowers  who  will  take  bank  notes  of  the 
lending  bank,  and  circulate  them  over  the  country  in  the  purchase  of 
agricultural  products.  While  the  notes  remain  in  circulation,  the  bank 
is  receiving  interest  on  them  from  the  borrower,  —  interest  not  for  the 
loan  of  money,  but  for  the  loan  by  the  bank  of  its  promises  to  pay  money 
when  demanded.  So,  on  a  loan  made  by  a  bank  to  one  of  its  depositing 
customers,  the  bank  receives  interest  only  on  its  promise  to  pay  the 
borrowed  money  when  the  borrower  shall  from  time  to  time  draw  for 
the  same.  And  when  a  deposit  is  thus  drawn  from  a  bank,  the  draft  is 
not  necessarily  paid  in  money,  but  in  bank  notes  which  may  obtain  a 
circulation.  This  advantage  is  a  usual  attendant  of  the  deposits  of  some 
customers,  and  makes  their  accounts  doubly  beneficial  to  a  bank. 
Whether  a  depositor  asks  for  more  loans  than  his  deposit  account  entitles 
him  to  receive,  is  a  question  whose  solution  depends  on  whether  the  ba.nk 
can  lend  all  its  money  to  better  depositing  customers,  or  more  profitably 
iise  it  in  loans  for  circulation.     A  banker  should,  however,  estimate 


m 


A    TREATISE    ON    BANKING. 


liberally  the  merits  which  pertain  to  a  steady  customer ;  not  deciding  on 
any  proposed  loan  by  the  amount  of  the  proposer's  deposit  at  the  time 
of  the  proposal,  but  his  antecedent  deposits,  which  were  doubtless  made 
in  reliance  on  the  bank  for  a  fair  reciprocity  of  benefits.  Competition 
lor  profitable  customers  exists  among  banks  as  eagerly  as  competition 
among  borrowers  for  bank  loans  ;  hence  liberality  to  customers  by  a 
banker  is  as  much  a  dictate  of  interest  as  of  justice. 

Selection  of  Loam  founded  on  the  Place  nf  their  liepayment.  —  Notes 
and  drafts  discounted  by  country  banks,  and  payable  in  New  York, 
Albany,  Troy,  and  some  other  eastern  places,  are  payable  in  a  currency 
whijse  value  is  enhanced  some  half  of  one  per  cent,  by  the  rate  of 
exchange,  which  exists  in  favor  of  the  east,  and  against  the  west.  As 
country  banks  never  allow  any  premium  in  the  reception  of  such  paper, 
the  benefit  of  the  exchange  is  a  strong  inducement  to  a  country  banker 
for  preferring  loans  thus  payable  to  loans  payable  at  his  own  counter. 
Borrowers  will  often  take  advantage  of  this  predilection,  and  make 
notes  payable  artificially  at  New  York,  as  a  means  of  obtaining  a  loan 
of  a  country  banker.  Notes  thus  made  are  rarely  paid  at  maturity ; 
hence,  so  far  as  a  banker  relies  on  their  payment,  and  founds  his  busi- 
ness calculations  thereon,  they  are  hurtful.  To  the  extent  that  he  'col- 
ludes with  the  maker  and  supplies  him  with  funds  by  which  any  such 
note  can  be  paid  at  New  York,  at  a  loss  to  the  maker  of  the  difference 
in  the  rate  of  exchange,  the  transaction  is  unlawful ;  and  banking  is 
not  exempt  from  the  ordinary  fatality  which  ever  in  a  long  course 
of  business  makes  honesty  the  best  policy.  To  gain  unlawfully  must 
also  be  a  poor  recommendation  to  a  banker,  with  any  thoughtful  stock- 
holder ;  for  if  a  man  will  collude  to  make  dishonest  gains  for  his 
stockholders,  what  security  can  the  stockholders  possess  that  he  will 
not  collude  against  them,  to  make  dishonest  gains  for  himself?  A 
country  banker  may  properly  discount  a  note  payable  in  New  York 
when  the  maker's  business  will  make  New  York  the  most  conven- 
ient place  of  payment,  though  the  borrower's  residence  may  be  in 
the  country :  such  is  often  the  case  with  drovers,  lumbermen,  and 
some  manufacturers.  Transactions  of  this  circuitous  nature  must, 
however,  be  spontaneous  on  the  part  of  the  borrower ;  for  a  note 
is  usurious  if,  in  addition  to  the  receipt  of  legal  interest,  the  banker 
superadds,  as  a  condition  of  the  loan,  that  it  must  be  paid  at  a  dis- 
tant city,  and  consequently  in  a  currency  more  valuable  than  that 
the  lender  received.  But  when  such  loans  are  legal,  and  possess  the 
best  commercial  character  for  punctuality  and  security,  they  are  not 
always  so  advantageous  to  the  country  bank  as  notes  payable  at  the 
country  bank,   and  connected  with  the  circulation   of  bank   note's   or 


THE    BANKER. 


31 


■with  deposits.     The  force  of  this  remark  can  perhaps  be  better  seen  in 
wiiat  follows. 

Selection  of  Loans  founded  on  the  Sale  of  Exchange.  —  Banks  can  usu- 
ally make  as  many  loans  as  they  desire  to  borrowers  who  will  use  the 
loan  in  purchasing  from  the  bank  a  draft  on  New  York  or  other  eastern 
city,  whereby  the  bank  will  obtain  a  premium  on  the  sale  of  the  draft, 
in  addition  to  the  interest  on  the  loan.  The  operation  becomes  pecu- 
liarly advantageous  to  the  bank  when  the  loan  is  itself  payable  in  New 
York,  for  while  the  borrower  pays,  in  such  a  transaction,  a  half  of  one 
per  cent,  to  the  bank  for  a  bank  draft  on  New  York,  he  subsequently 
repays  in  New  York  the  borrowed  money  without  receiving  any  return 
premium  from  the  bank.  But  how  lucrative  soever  such  a  transaction 
seems,  banks  can  rarely  transact  profitably  much  of  such  business. 
Should  the  entire  capital  of  a  safety  fund  bank  of  three  hundred 
thousand  dollars  be  employed  in  discounting  drafts  on  New  York 
payable  at  three  months  from  the  time  of  discount,  and  should  the 
bank  pay  therefor  sight  drafts  on  New  York,  charging  for  them  a  pre- 
mium of  a  half  of  one  per  cent.,  the  bank  could  not  pay  its  stockhold- 
ers above  six  per  cent,  the  year  in  bank  dividends.  To  pay  that  much, 
the  bank  would  have  to  earn  nine  per  cent,  the  year  on  its  capital,  as 
follows : 

Dividend  of  six  per  cent,  the  year  on  S300,000  is  -         -     $18,000  00 
Half  per  cent,  to  be  paid  to  the  safety  fund,  -         -         -  1,500  OC 

Salaries,  taxes,  .stationery,  and  other  contingencies  during 
the  year,  at  the  lowest  calculation  for  such  a  capital,        -         7,500  OC 


Making  a  total  which  is  equal  to  9  per  ct.  on  $300,000,  $27,000  OC 
Being  just  what  such  a  bank  would  earn  during  the  year,  if  it  transacted 
no  other  business  than  the  discount  of  drafts  as  above  supposed.  The 
calculation  shows  that  the  sale  of  exchange  must  be  deferred  to  business 
which  brings  with  it  circulation  or  deposits.  They  are  the  only  sources 
of  large  profits,  as  well  as  the  great  instruments  of  legitimate  banking. 
Brokers  can  deal  in  exchange  as  well  as  banks,  and  banks  should 
make  loans  predicated  on  the  sale  of  exchange,  for  only  so  much  as  can 
be  thus  sold  without  impairing  the  ability  of  the  bank  to  lend  money  for 
circulation,  &;c.  The  ability  of  a  bank  to  lend  for  circulation  is  im- 
paired by  the  sale  of  exchange,  because  such  sales  take  the  funds  with 
which  country  banks  redeem  their  bank  notes ;  and  no  banker  is  wil- 
ling to  issue  bank  notes  for  circulation  except  in  proportion  to  the 
amount  which  he  possesses  of  redeeming  funds. 

Selection  of  Loans  founded  on  a  Commission  for  their  Collection.  —  BanKs 
often  make  loans  that  are  payable  at  places  where  the  currency  that 
4 


3863'77 


^8  A    TREATISE    ON    BANKING. 

will  be  received  in  payment,  is  worth  less  to  the  lending  bank  than  a 
payment  at  its  own  counter.  But  banks  turn  to  a  pvotii  this  disadva-a- 
tage,  by  charging,  in  addition  to  the  interest,  a  commission  for  collectinj? 
payment  of  the  loans.  Notes  payable  as  above  are  given  extensively 
by  country  merchants  to  the  persons  of  whom  they  purchase  goods,  and 
the  commission  charged  by  banks  for  collecting  the  payment  of  sucli 
notes  varies  according  to  distance,  and  the  facilities  which  exist  for 
making  the  collections ;  but  whether  a  bank  can  make  money  by  such 
collections,  depends  on  the  arrangements  it  is  able  to  make  ;  for 
instance,  a  bank  at  Buffalo  may  receive  one  per  cent,  for  collecting  a 
note  payable  at  Utica,  while  a  bank  at  Utica  may  receive  one  per  cent, 
for  collecting  a  note  payable  at  Buffalo ;  hence,  if  the  two  banks  can 
exchange  this  paper  with  each  other,  each  bank  will  be  paid  at  its  own 
counter,  and  gain  the  one  per  cent.,  without  any  iuLonvenience  except 
the  trouble  of  corresponding  with  each  other,  and  the  expense  of  post- 
age. Every  good  banker  endeavors  to  acquire  correspondents  of  the 
character  indicated,  for  in  banking,  as  in  other  business,  competition 
keeps  down  profits ;  so  tliat  much  gain  is  impracticable  except  as  a. 
result  of  good  management. 

Selection  of  Loans  founded  on  the  Time  they  are  to  Endure.  —  A%  everv 
loan  is  usually  attended  with  some  advantage  to  the  bank,  in  the  ways 
we  have  explained,  beyond  the  interest  paid  by  the  borrower,  the  sooner 
the  loan  is  to  be  repaid  to  the  bank,  the  more  frequently  will  the  bank 
be  able  to  reloan  the  money,  and  obtain  a  repetition  of  the  incidental 
advantages.  Loans,  however,  that  are  not  longer  to  run  than  sixty 
days  must  be  discounted  at  the  rate  of  six  per  cent,  the  year  interest, 
instead  of  .seven,  by  all  safety  fund  banks  ;  hence,  when  a  safety  fund 
banker  makes  such  loans,  the  incidental  benefits  must  be  sufficient  to 
countervail  this  loss  of  interest,  or  longer  paper  will  be  more  profitable. 

Time  Estimated  with  reference  to  the  Prospective  Wants  of  a  Bank. As 

country  banks  are  subject  every  spring  and  fall  to  a  revulsion  of 
their  bank  notes,  every  judicious  banker  will  endeavor  to  so  select  the 
loans  which  he  makes  during  a  year,  that  large  amounts  of  them  will 
become  payable  at  the  precise  periods  of  the  spring  and  fall  when  funds 
will  be  most  needed.  This  is  imitating  the  conduct  of  Pharaoh,  who, 
during  the  years  of  plenty,  accumulated  provisions  for  the  periods  of 
apprehended  famine.  Many  months  of  every  year  are  months  of  plenty 
with  every  well-conducted  bank.  The  paper  which  is  selected  for  the 
future  contingency  will  be  useful  in  proportion  to  its  reliability;  and 
paper  payable  in  New  York,  or  other  eastern  cities,  will  be  more  useful 
'han  any  other.  No  rule  of  banking  is  more  practically  valuable  than 
•he  forcg-oins. 


THE    BANKER.  35» 

Time  rvlth  reference  to  Panics  and  Pressures.  — As  banking  is  liable  to 
panics  and  pressures  which  may  arise  without  being  preceded  by  any  long 
premonitory  symptoms,  a  banker  must  invest  his  funds  in  short  loans, 
which  measurably  accomplish  the  feat  that  is  proverbially  impossible,  "to 
have  a  cake  and  eat  it  at  the  same  time  :"  — that  is,  by  means  of  short 
loans,  the  bank  keeps  its  funds  always  available  within  a  short  period 
and  yet  keens  them  always  loaned  out  on  interest.  The  banks  of  large 
cities  are  able  to  make  loans  payable  on  demand,  or  in  a  few  days' 
notice  ;  while  country  banks  possess  no  such  opportunities,  but  are 
able  usually  to  deposit  their  spare  funds  ia  some  banks  of  Albany  or 
New  York,  subject  to  a  repayment  on  demand,  or  on  short  notice  ;  and 
in  the  mean  time  to  receive  on  the  deposit  an  interest  of  some  four  or 
five  per  cent.  Such  arrangements  are  peculiarly  beneficial  to  country 
banks,  as  every  country  bank  is  compelled,  by  existing  laws,  to  keep 
in  New  York  or  Albany  an  agency  for  the  redemption  of  its  bank  notes  ; 
and  hence  must  keep  funds  in  one  of  those  cities.  Experience,  however, 
has  painfully  demonstrated,  in  a  recent  bank  failure,  that  the  conven- 
ience of  an  interest  paying  depository  is  not  exempt  from  danger.  The 
legislature,  in  compelling  country  banks  to  incur  this  danger,  has  looked 
solely  to  the  convenience  of  the  public,  and  possibly  estimated  too 
lightly  or  disregarded  the  hazard  to  the  banks. 

A  Banker  should  acquaint  himself  with  the  Pecumartj  Circumstances  of  his 
Dealers.  —  What  is  every  person's  business  is  proverbially  nobody's; 
hence  the  safety  of  banks  depends  less  on  boards  of  directors  than  on  some 
single  person  to  whom  the  bank  is  specially  confided,  and  to  whom  we 
have  alluded  under  the  name  of  the  banker.  He  is  to  be  always  present, 
and  always  responsible,  in  his  feelings  and  in  public  estimation,  foi 
the  prosperity  of  the  bank ;  and  for  these  services  he  ought  to  be  well 
compensated,  pecuniarily,  so  as  to  stimulate  his  faculties  to  their  besl 
efforts.  We  mistake  human  nature  when  we  expect  great  efforts  from 
any  man,  and  supply  no  proper  motive  therefor.  The  banker  we  have 
described  will  acquaint  himself  with  the  pecuniary  circumstances  of  the 
dealers  of  his  bank,  an^of  their  endorsers,  and  of  all  persons  who, 
though  not  present  debtors  or  endorsers,  may  probably  become  such 
Persons  enough  will  hasten  to  inform  a  banker  when  any  of  his  debtors 
are  become  declared  insolvents  ;  but  such  shutting  of  the  stable  door 
after  the  horse  is  stolen  is  not  the  information  that  is  useful  to  a  banker. 
The  information  which  is  useful  must  be  made  while  the  person  in  ques- 
tion retains  a  reputation  for  solvency  ;  and  the  information  will  be  val- 
uable in  proportion  as  "  it  scents  any  coming  miscliief  in  the  lar-off 
gale."  To  acquire  information,  some  country  bankers  obtain  extracts 
from  the  assessment  rolls  of  the  towns  within  the  circuit  of  their  deal- 
ings ;  such  extracts  including  only  the  men  of  reliable  property.     Othei 


40 


A   TREATISE    ON    BANKING. 


bankers  keep  a  book,  composed  by  themselves,  of  names  accumulated, 
from  day  to  day,  of  persons  whose  pecuniary  position  may  interest  their 
bank.  Such  a  book  may  assume  the  form  of  an  extensive  alphabet,  and 
the  persons  therein  may  be  registered  under  the  name  of  the  town  in 
which  they  reside.  By  this  arrangement,  when  a  banker  is  brought  in 
contact  with  a  person  who  resides,  say,  in  Oswego,  he  can,  by  looking 
in  his  book  under  the  head  of  Oswego,  see  the  names  of  his  debtors,  and 
obtain  such  information  in  relation  to  them  as  the  person  from  Oswego 
can  supply  j  and  which  information  he  can  record  against  each  nam« 
.-(?spectively  The  information  thus  acquired  may  be  revised  by  other 
informants,  as  opportunities  may  offer ;  and  the  banker  must  give  to 
the  whole  such  an  interpretation  as  his  judgment  shall  dictate.  The 
recoid  will  be  improved  by  noting  the  name  of  the  person  from  whom 
the  information  is  received,  and  the  date  of  its  reception  ;  for  the  infor- 
mation will  be  reliable  in  proportion  somewhat  to  its  recentness,  and  to 
the  character  of  the  informant.  In  large  cities,  where  discounts  are  rarely- 
made  except  to  persons  of  the  city,  who  are  personally  known  to  some  of 
the  directors,  such  a  record  may  be  useless  ;  but  in  country  banking, 
the  borrowers  and  their  endorsers  are  generally  residents  of  remote 
places,  and  unknown,  personally,  in  the  locality  of  the  bank.  A  coun- 
try banker,  who  should  insist  on  a  personal  acquaintance  with  his  dealers 
and  their  endorsers,  will  find  his  business  restricted  to  a  circle  too  small 
for  the  employment  of  his  capital.  In  vain  will  such  a  banker  insist 
that  he  ought  not  to  make  loans  to  persons  of  whom  he  possesses  no 
knowledge ;  the  answer  will  be  that  he  should  acquire  the  knowledge. 
It  is  indispensable  to  his  .bank.  He  is  bound  to  know  a  sufficient 
number  of  persons  to  enable  his  bank  to  employ  its  capital  advanta- 
geously. Every  note,  therefore,  that  he  rejects  for  want  of  knowledge,  is 
ostensibly  a  slight  reproach  on  him,  in  cases  where  he  has  not  a  suffi 
ciency  of  known  borrowers;  while  every  note  that  he  rejects  or  accepts 
by  means  of  his  knowledge  of  the  parties  is  a  tribute  to  his  industry 
and  vigilance. 

A  Baiiker  should,  as  far  as  is  practicabIe,\nom  the  Signatures  of  his 
Dealers.  —  The  preceding  remarks  will  show  why  country  banks  are 
specially  liable  to  loss  from  forgeries.  Moreover,  many  of  the  mak- 
ers and  endorsers  who  deal  with  country  banks  write  poorly,  and  their 
signatures  bear  but  little  internal  evidence  of  genuineness,  even  when 
you  are  partially  acquainted  with  the  parties  ;  for  the  same  person  will 
write  differently  at  different  times,  and  especially  with  different  pens 
and  different  qualities  of  ink ;  and  he  varies  thp«e  continually.  Still 
the  greater  the  danger,  the  greater  is  the  caution  which  the  banker  must 
exercise.  He  must  bring  to  the  difficulty  all  the  scrutiny  of  whi.h  the 
case  is  susceptible,  or  he  will  not  stand  excused  for  consequent  lossei,. 


THE    BANKER.  41 

A  comparison  of  any  proffered  signature  with  one  that  is  genuine, 
though  encumbered  with  diHiculties  as  above  explained,  is  a  guide  that 
should  not  be  neglected  ;  and  it  is  often  the  best  that  can  be  resorted 
to.  Some  bankers,  therefore,  keep  a  book  in  which  every  person  who' 
frequents  the  bank  inserts  his  name.  The  signatures  should  be  placed 
alphabetically,  to  facilitate  a  future  reference  to  them.  The  endorsers 
may  never  visit  the  bank ;  but,  when  a  note  is  paid,  the  names  of  the 
endorsers  may,  with  the  consent  of  the  maker,  be  cut  from  the  note,  and 
•Dasted  into  the  book,  in  their  proper  order.  In  no  very  long  time,  a  mass 
3f  autographs  may  be  thus  collected.  Some  names  on  notes  may  not  be 
deserving  of  such  preservation  ;  and  in  this  particular,  as  in  all  others, 
the  banker  must  exercise  his  judgment. 

A  Banker  should  know  the  Residence  of  Endorsers.  —  The  law  in  relation 
to  endorsers  renders  them  liable  only  on  due  notice  of  the  non-payment 
of  the  endorsed  note.  This  avenue  of  loss  is  felt  but  seldom  in  large 
cities;  but  in  the  country  it  produces  constant  danger.  A  country 
banker,  therefore,  must  know  where  endorsers  reside,  and  usually  the 
information  can  be  obtained  most  readily  when  each  note  is  discounted, 
and  from  the  person  who  brings  it  for  discount.  The  information  can 
be  written  on  the  note  under  the  name  of  the  endorser,  and  it  will  serve 
as  a  direction  to  the  notary  public,  should  the  note  be  protested  for  non- 
payment. The  laws  of  our  State  required,  formerly,  that  the  notice  of 
non-payment  should  be  forwarded  by  mail  to  the  post-office  nearest  to  the 
residence  of  the  endorser.  This  imposed  on  the  banker  a  knowledge  of 
postal  locations  that  added  much  to  the  difficulty  of  his  position.  The 
law  has  since  meliorated  the  difficulty  by  rendering  a  notice  suffi- 
cient if  directed  to  the  town  in  which  an  endorser  resides.  "When  a 
banker  desires  to  avail  himself  of  this  law,  he  had  better  comply  liter- 
ally with  its  conditions,  and  direct  the  notice  "  to  the  town  of  A,"  — 
thus  showing  that  your  letter  is  not  sent  to  A,  but  to  the  town  of  A  ;  — 
leaving  the  particular  post-office  in  the  town  (some  towns  have  more 
than  one)  to  the  discretion  of  the  postmaster,  for  whose  errors  you  are 
not  accountable  :  — for  instance,  two  or  more  post-offices  are  located  in 
the  town  of  Whitestown,  and  one  of  them  is  at  a  place  called  Whites- 
town  ;  hence,  if  you  direct  a  notice  "  Whitestown,"  you  designate  a 
post-office,  and  it  may  not  be  the  one  which  the  endorser  frequents. 
In  such  a  case  the  notice  would  probably  be  deemed  defective,  and  the 
debt  would  not  be  recoverable  against  an  endorser  thus  notified  ;  but 
should  you  direct  "to  the  town  of  Whitestown,"  you  designate  no 
post-office,  and  as  you  have  performed  all  that  the  law  requires,  the 
endorser  will  be  holden  for  the  debt,  in  whatever  part  of  the  town  he 
may  reside. 

4* 


42  A   TREATISE    ON    BANKING. 

A  Banker  must  know  the  Pecuniary  Position  of  his  Bank.  —  As  a  banker 
will  lend  to  the  extent  of  his  ability,  that  he  may  make  for  his  bank  all 
the  gains  in  his  power,  he  must  be  well  acquainted  with  the  present 
pecuniary  means  and  liabililies  of  his  bank.  He  can  keep  on  his  table 
a  summary  showing  the  precise  amount  of  his  funds,  and  where  they 
are  situated,  and  of  what  they  are  composed ;  also,  an  aggregate  of  his 
various  liabilities.  Such  a  summary,  when  corrected  daily,  or  more 
frequently  if  necessary,  will  constitute  a  chart  by  which  he  will  be  able 
to  judge  whether  he  can  lend,  or  whether  he  must  retrench  existing 
loans.  The  funds  that  will  be  adequate  to  any  given  amount  of  liability, 
a  banker  must  learn  by  experience,  embarrassed  as  he  will  be  by  a 
want  of  uniformity  in  the  results  of  his  experience,  at  different  periods. 
Every  bank  must  be  liable,  momentarily,  to  demands  for  payment  of  its 
bank  notes  and  deposits,  beyond  its  present  funds.  Practically,  how 
ever,  if  a  banker  has  funds  enough,  day  by  day,  to  meet  the  require- 
ments of  the  day,  he  has  funds  enough.  "  Sufficient  for  the  day  is  the 
evil  thereof,"  is  a  proverb  peculiarly  applicable  in  banking. 

Prospective  Resources.  —  But  a  banker  must  not  be  satisfied  by  know- 
ing that  his  funds  of  to-day  will  be  sufficient  for  the  wants  of  the  day. 
He  must  possess  a  reasonable  assurance  that  the  same  will  be  his  posi- 
tion "  to-morrow,  and  to-morrow,  to  the  end  of  time."  To  gain  this 
assurance,  he  ought  to  keep  also  before  him  one  or  more  lists  in  detail 
of  his  prospective  resourcesj  showing  what  notes  and  acceptances  will 
be  payable  to  the  bank  daily  for  some  weeks  or  months  ahead,  and 
where  they  are  payable.  With  such  lists,  and  a  knowledge  of  the 
reality  of  the  paper  thus  going  onward  to  maturity,  he  will  be  able 
to  judge  whether  his  prospective  resources  will  need  the  aid  of  his 
existing  unemployed  funds ;  or  whether  he  may  loan  them,  and  even 
extend  his  liabilities  in  anticipation  of  a  prospective  surplusage  of 
resources. 

Provision  for  the  Future.  —  By  means  of  such  lists  as  we  have  jusl 
described,  should  a  banker  discover  that  his  existing  resources  will  be 
small  during,  say,  the  month  of  June,  he  can  aid  the  delect  by  discount- 
ing in  the  preceding  May,  April  or  March,  paper  that  will  mature  in 
June.  By  thus  regulating,  prospectively,  his  future  resources,  he  can 
be  always  provided  with  funds.  And  that  a  banker  may,  at  all  times, 
be  master  of  his  resources,  he  should  never  promise  prospective  loans, 
or  make  loans  with  any  promise  of  their  renewal.  The  more  he  keeps 
uncommitted,  the  better  will  he  be  able  to  accommodate  himself  to  future 
exigencies.  Banking  is  subject  to  sufficient  uncertainties,  vnthout 
unnecessarily  aggravating  them  by  prospective  agreements.  A  banker 
may  be  unable  to  fulfil  such  pledges,  and  be  thus  compelled  to  falsify 


THE    BANKER.  43 

his  promises  ;  or  he  may  be  able  to  fulfil  them  only  at  a  sacrifice  of  the 
interests  of  his  bank,  and  thus  be  placed  in  the  unwholesome  dilemma 
of  injuring  his  personal  character,  or  of  preventing  the  injury  by  only  a 
sacrifice  of  the  interests  of  his  bank. 

General  Supervision.  —  A  banker  is  compelled  to  employ  officers  to 
whom  he  must  intrust  his  vaults  and  their  contents.  Robberies  are  often 
committed  by  persons  thus  intrusted,  and  some  such  robberies  have 
remained  long  concealed.  The  banker  cannot  be  responsible  for  all 
such  occurrences ;  still,  vigilance  can  accomplish  much  in  the  way  of 
security  against  mischances,  and  the  banker  is  responsible  for  the  exer- 
cise of  all  practicable  vigilance.  Robberies  and  frauds  possess  usually 
some  discoverable  concomitants.  No  man  plunders  to  accumulate  prop- 
erty that  is  not  to  be  used.  Its  use,  therefore,  which  can  rarely  be  wholly 
concealed,  is  a  clue  which  a  vigilant  eye  can  trace  to  the  plunderer. 
Nearly  every  plunderer  is  a  prodigal,  and  may  thereby  be  detected ; 
nearly  every  plunderer  is  needy,  and  should  therefore  be  suspected. 
The  banker  should  know  human  nature,  and  be  able  to  trace  effects  to 
their  causes,  and  to  deduce  effects  from  causes.  To  this  extent  he  is 
answerable  for  the  safety  of  his  bank.  The  sentinel  whose  post  happens 
to  be  surprised  by  an  enemy  may  escape  punishment  as  a  criminal, 
but  he  can  rarely  gain  commendation  for  vigilance,  or  escape  censure 
for  carelessness. 

Over  Drafts.  —  To  permit  over  drafts  is  to  make  loans  without  endors- 
ers, and  without  the  payment  of  interest.  It  is,  moreover,  to  empower 
a  dealer  to  control  your  resources.  No  mode  of  lending  money  can  be 
more  inconsistent  with  all  safe  banking ;  and  it  should  never  be  per- 
mitted. Still,  every  man  who  keeps  a  bank  account  can  draw  checks 
for  an  amount  exceeding  his  balance  in  bank  ;  nor  can  the  banker  per- 
sonally supervise  the  payment  of  checks.  A  vigilant  banker  will,  how- 
ever, provide  vigilant  .subordinate  officers :  "  The  eye  of  the  master  mak- 
cth  diligent,"  say  the  Scriptures.  An  intelligent  and  careful  teller 
will  soon  learn  whom  he  must  watch  ;  but  after  all  precautions  an  over- 
draft may  be  perpetrated,  and,  whether  by  accident  or  design,  the  book- 
keeper should  forthwith  report  to  the  banker  the  occurrence,  and  he 
must  act  thereon  as  his  judgment  shall  deem  proper. 

Enforcement  of  Paijments.  —  No  system  of  banking  can  escape  the 
casualty  of  doubtful  debts.  Usually  the  most  favorable  time  to  coerce 
payments  is  when  they  first  become  payable.  Then  the  debtor  has  ex- 
pected to  pay,  and  if  he  is  then  in  default,  no  certain  dependence  can  be 
made  on  his  subsequent  promises.  He  is  also  usually  less  offended  by 
a  legal  enforcement  of  payments  when  they  are  promptly  enforced,  fm<i 


44  A    TREATISE    ON    BANKING. 

when  he  knows  the  creditor  is  disappointed  by  the  default,  than  he  is 
after  the  default  has  been  tacitly  acquiesced  in  by  a  long  forbearance  of 
coercive  measures.  Additional  security,  when  necessary,  can  also  be 
more  readily  obtained  at  the  time  of  the  default,  than  it  can  after  the 
debtor  has  become  reconciled  by  time  to  his  dishonorable  position.  His 
credit  is  better  now  than  it  will  be  subsequently,  and  he  can  more  read- 
ily now  than  subsequently  obtain  responsible  endorsers.  In  relation  to 
the  extension  of  time  on  receiving  additional  security  on  a  weak  debt,  any 
extension  that  is  productive  of  security  is  a  less  banking  evil  than  inse- 
curity J  just  as  any  protraction  of  disease  that  results  in  health  is  a  less 
physical  evil  than  death. 

Adherence  to  Good  Principles.  —  A  banker  will  be  often  subjected  to 
importunity  by  persons  who  will  desire  a  deviation  from  the  usual 
modes  of  banking.  They  will  propose  a  relaxation  of  good  rules,  and 
allege  therefor  some  pressing  emergency  ;  but  if  the  relaxation  involves 
any  insecurity,  any  violation  of  law,  or  of  official  duty,  the  banker 
should  never  submit,  even  when  the  result  may  promise  unusual  lucra 
tiveness  to  his  bank.  "While  a  banker  adheres  with  regularity  to  known 
forms  of  business  and  settled  principles.  Providence  is  a  guarantee  for 
his  success  ;  but  when  he  deviates  from  these,  Providence  is  almost 
equally  a  guarantee  of  disaster  both  personal  and  official. 

A  Banker  should  beware  of  Persnasion,  and  of  undue  Pertinacity  in  Ap 
pHcants.  —  Banking  is  a  business,  and  should  be  reciprocally  beneficial 
to  the  borrower  and  the  lender.  When  a  borrower's  business  cannot 
yield  the  requisite  reciprocity  of  benefit,  he  will  often  attempt  to  mend 
the  defect  by  pertinacity  of  application,  and  by  persuasions  addressed  to 
the  directors  of  a  bank  personally,  as  well  as  to  the  banker ;  and  by 
servility  and  sycophancy.  Such  conduct  is  a  strong  symptom  of  some 
latent  defect  in  the  applicant's  pecuniary  position,  and  the  appliances 
should  strengthen  a  banker  in  his  refusal  of  loans,  rather  than  facilitate 
their  acquisition.  Loans  thus  obtained  rarely  result  favorably  to  the 
lender. 

A  Bank  should  beware  of  Speculators.  —  No  man  is  safe  when  engaged 
in  a  speculation,  especially  when  the  price  of  the  article  that  he  pur- 
chases is  above  the  usual  cost  of  its  production.  The  speculator's  intel- 
lect soon  loses  its  control  over  him,  and  he  will  be  controlled  by  his 
feelings,  and  they  are  unnaturally  excited.  He  becomes  a  monomaniac 
in  the  particular  concern  with  which  he  is  engaged.  He  will  increase 
his  purchases  beyond  all  moderation,  and  at  prices  which  he  himself, 
when  \e  commenced  his  purchases,  would  have  deemed  uinous.  Many 
banks  are  destroyed  by  such  speculators.     A  bank  will  loan  to  them  till 


THE    BANKER.  45 

its  safety  seems  to  require  that  the  speculation  must  be  upheld  against 
a  railing  market ;  and  the  eflbrt  is  made  till  the  continued  decline  in 
prices  ruins  both  speculators  and  sustaining  bank. 

A  Banker  should  keep  independent  of  his  Debtors.  —  "When  a  debtor 
arrives  at  a  certain  magnitude  of  indebtedness  he  becomes  the  master 
of  his  creditor,  M-ho  is  somewhat  in  the  position  of  Jonah  when  swal- 
lowed by  the  whale.  The  debtor  can  say  to  a  bank  thus  circumstanced, 
that  to  stop  discounting  for  him  will  ruin  him,  and  that  his  ruin  will 
involve  a  loss  of  the  existing  debt.  No  prudent  banker  will  be  placed 
in  such  a  position,  but  should  any  banker  lapse  into  so  sad  an  error,  he 
will  rarely  n^end  his  position  by  yielding  to  the  proposed  necessity 
for  further  loans.  He  had  better  brave  the  existing  evil  than  yield 
to  an  argument  which,  if  already  too  potent  to  be  disregarded,  will 
acquire  additional  strength  by  every  further  discount,  and  render  his 
inevitable  fall  more  disastrous  to  his  stockholders,  and  more  disreputable 
to  himself. 

Economy.  —  We  will  close  our  summary  of  a  banker's  duties  with  a 
few  remarks  on  his  contingent  expenses.  The  more  a  banker  can 
reduce  their  amount,  the  more  easily  will  he  make  reasonable  dividends 
of  profit  among  his  stockholders,  without  an  undue  expansion  of  loans 
and  consequent  anxiety  to  himself.  The  income  of  a  bank  is  an  aggre- 
gate of  only  petty  accumulations.  The  unnecessary  expenditure  ot 
every  hundred  dollars  the  year,  will  nullify  the  interest  on  four  ninety 
day  loans  of  fifteen  hundred  dollars  each  —  loans  often  withheld  from 
meritorious  claimants.  The  economy  of  which  we  speak  is  not  any 
unjust  abridgment  of  proper  remunerative  salaries  to  faithful  officers 
and  servants,  who  should,  however,  labor  diligently  and  perseveringly  in 
their  vocations,  as  men  labor  in  other  employments  ;  so  that  the  bank 
may  economize  in  the  number  of  its  agents,  instead  of  economizing  in 
the  magnitude  of  their  salaries.  A  hundred  dollars,  or  a  thousand, 
when  contrasted  with  the  capital  of  a  bank,  may  seem  a  small  matter, 
and  probably  bank  expenditures  are  often  incurred  under  such  a  contrast ; 
but  the  true  contrast  lies  between  the  expenditure  and  the  net  per  cent- 
age  of  a  bank's  gains.  A  bank  whose  net  income  will  not  exceed  the 
legal  rate  of  interest  possesses  no  fund  from  which  to  squander.  And 
banks  often  expend  an  unduly  large  part  of  their  capital  in  architecture 
to  ornament  the  city  of  their  location,  or  to  riva.  some  neighboring 
institution,  whose  extravagance  ought  to  be  shunne;),  not  followed.  No 
person  has  yet  shown  why  banks  should  be  built  like  palaces,  while  the 
owners  of  the  banks  are  to  a  good  extent  poor,  anc  live  humbly.  The 
custom  is  perhaps  founded  on  the  delusion  of  deeniing  a  great  capital 
id'^ntical  with  great  wealtn.     When  several  men   for  any  purposes  of 


46  A    TREATISE    ON    BANKING. 

gam,  unite  thf^ir  several  small  capitals,  they  may  well  need  a  larger 
building  and  more  agents  than  each  man  would  require  were  he  unas- 
sociated ;  but  that  the  association  can  aSord  an  organization  increased 
in  splendor  as  much  as  in  magnitude,  is  a  fallacy  somewhat  analogous 
to  the  blunder  of  the  Irishman,  who,  hearing  that  his  friend  intended  to 
walk  forty  miles  daring  a  day,  said  that  he  would  walk  with  him,  and 
then  they  could  walk  eighty  miles. 


PART    THIRD.  — THE    MAJJ 

Havinq  completed  our  summary  of  banking,  and  the  duties  consequent 
khcreon  of  a  banker,  we  will  subjoin  a  few  suggestions  personal  to  tho 
mt^n  who  has  to  perform  the  duties. 

He  should  be  wary  of  recommendations.  —  When  solicited  by  a  neighbor 
cr  a  friend,  few  men  possess  vigor  enough,  or  conscientiousness  enough, 

o  refuse  a  recommendation,  or  to  state  therein  all  they  suspect  or  appre- 
nend.     They  will  studiously  endeavor  not  to  make  themselves  pecunia- 

ily  responsible  by  any  palpable  misrepresentation ;  hence  they  will  so 

lualify  the  recommendation  that  it  will  admit  of  a  construction  consist 
ent  with  truth  ;  but  the  qualification  will  be  so  enigmatical  or  subtle 

nat  the  banker  will  not  interpret  it  as  the  recommender  will  show  s"b 
sequently  it  ought  to  have  been  interpreted.  Besides,  the  man  v.», 
merely  recommends  a  loan  acts  under  circumstances  that  are  much  less 
favorable  to  caution  than  the  man  who  is  to  lend.  When  we  are  in  the 
act  of  making  a  loan,  our  organization  presents  the  danger  with  a  vivid 
ness  that  is  not  excited  by  the  act  of  recommending.  To  speculatively 
jelieve  that  we  will  suffer  the  extraction  of  a  tooth,  is  a  wholly  differen 
matter  from  sitting  down  and  submitting  to  the  operation.  Suicide 
would  be  far  more  common  than  it  is,  if  a  man  could  feel,  when  the  act 
was  to  be  performed,  as  he  feels  when  he  only  prospectively  resolves  on 
performing  it.  This  preservative  process  of  nature  no  banker  should 
disregard  by  substituting  any  man's  recommendation  for  the  scrutiny 
of  his  own  feelings  and  judgment  at  the  time  when  the  loan  is  to  be  con- 
summated ;  though  he  may  well  give  to  recommendations  all  the 
respect  which  his  knowledge  of  the  recommender  may  properly  deserve. 

lie  should  be  governed  by  his  own  judgment.  —  By  acting  according  to 
the  dictates  of  his  own  judgment,  a  man  strengthens  his  own  judgment 
as  he  proceeds ;  while  a  man  who  subordinates  his  judgment  to  other 
men's  is  continually  debilitating  his  own.  Nothmg  also  is  more  falla- 
cious than  the  principle  on  whicn  we  ordinarily  defer  to  the  decision  of 
a  multitude  of  counsellors.  If  fifty  men  pull  together  at  a  cable,  the 
pull  will  combine  the  strength  of  one  man  multiplied  by  fifty  ;  but  if 
fifty  men  del  berate  on  any  subject,  the  result  is  not  the  wisdom  )f  one 


48  A    TREATISE    ON    BANKING. 

man  multiplied  by  fifty,  but  at  most  the  wisdom  of  the  wisest  man  of 
the  assemblage  ;  just  as  fifty  men,  when  they  look  at  any  object,  can  see 
only  what  can  be  seen  by  the  sharpest  single  vision  of  the  group ;  they 
cannot  combine  their  vision  and  make  thereof  a  lens  as  powerful  as  the 
sight  of  one  man  multiplied  by  fifty.  A  banker  may,  therefore,  well 
resort  to  other  men  for  information,  but  he  may  differ  from  them  all,  and 
still  be  right;  any  way,  if  he  perform  the  dictates  of  his  own  judgment, 
he  performs  all  that  duty  requires ;  if  he  act  otherwise,  he  performs  less 
than  his  duty.  Let  the  counsel  of  your  own  heart  stand,  says  the  Bible  ; 
and,  by  way  of  encouragement,  it  adds,  that  a  man  can  see  more  of  what 
concerns  himself,  than  seven  watchmen  on  a  high  tower. 

Finally.  —  As  virtue's  strongest  guarantee  is  an  exemption  from  all 
motive  to  commit  evil,  a  banker  must  avoid  all  engagements  that  may 
make  him  needy.  If  he  wants  to  be  more  than  a  banker,  he  should  cease 
from  being  a  banker.  Should  he  discover  in  himself  a  growing  ten- 
dency to  irritability,  which  his  position  is  apt  to  engender,  let  him  resis* 
it  as  injurious  to  his  bank  and  his  peace  ;  and  if  he  should  find  himself 
popular,  let  him  examine  whether  it  proceeds  from  the  due  discharge  of 
his  duties.  A  country  banker  was  some  few  years  ago  dismissed  from 
•»  bank  which  he  had  almost  ruined,  and  was  immediately  tendered  an 
ii:.norary  public  dinner  by  the  citizens  of  his  village,  into  whose  favor 
his  misdeeds  had  unwisely  ingratiated  him.  The  service  of  massive 
plate  that  was  given  to  a  president  of  the  late  United  States  Bank  was  in 
reward  of  compliances  which  soon  after  involved  in  disaster  every  com- 
mercial interest  of  our  country.  Could  we  trace  actions  to  their  source, 
these  mistakes  of  popular  gratitude  would  never  occur.  The  morose- 
ness  that  we  abhor  proceeds  often  from  a  sensitiveness  that  is  annoyed 
at  being  unable  to  oblige  ;  while  the  amiability  that  is  applauded  pro- 
ceeds from  an  imbecility  that  knows  not  how  to  refuse. 

A  banker  should  possess  a  sufficiency  of  legal  knowledge  to  make 
him  suspect  what  may  be  defects  in  profiered  securities,  so  as  to  submit 
his  doubts  to  authorized  counsellors.  He  must,  in  all  things,  be  emi- 
nently practical.  Every  man  can  tell  an  obviously  insufficient  security, 
and  an  obviously  abundant  security ;  but  neither  of  these  constitute  any 
large  portion  of  the  loans  that  are  offered  to  a  banker.  Security  practi- 
cally sufficient  for  the  occasion  is  all  that  a  banker  can  obtain  for  the 
greater  number  of  the  loans  he  must  make.  If  he  must  err  in  his  judg 
ment  of  securities,  he  had  better  reject  fifty  good  loans  than  make  one 
bad  debt ;  but  he  must  endeavor  not  to  err  on  the  extreme  of  caution  or 
the  extreme  of  temerity ;  and  his  tact  in  these  particulars  will,  more 
than  any  other,  constitute  the  criterion  of  his  merits  as  a  banker. 


TEN  MINUTES'  ADVICE  ABOUT  KEEPING  A 
BANKER. 

BY  J.  W.  GILBART,  F.  R.  S  , 

GENERAL   MANAGER   OF   THE   LONDON    AND   WESTMINSTER    BANK 

1.  A  BANKER  is  a  person  who  has  an  open  shop,  with  proper  counters, 
clerks,  and  books,  for  receiving  other  people's  money,  in  order  to  keep  it 
safe,  and  return  it  upon  demand. 

2.  The  building  or  shop  in  which  this  business  is  carried  on  is  usu- 
ally called  in  London  a  "  Banking-house,"  but  in  Scotland,  and  in  the 
country  parts  of  England,  it  is  called  a  "  Bank."  The  word  "  bank  "  is 
also  employed  to  denote  the  partnership  or  company  who  carry  on  the 
business  of  banking.  Thus  we  say,  the  Bank  of  Scotland,  the  London 
and  Westminster  Bank,  the  Bank  of  Messrs.  Coutts  fc  Co. 

3.  When  a  company  of  this  kind  does  not  consist  of  more  than  six 
partners,  it  is  called  a  "  Private  Bank  ;"  but  when  the  company  consists 
of  several  hundred  partners,  it  is  called  in  Scotland  a  "  Public  Bank  " 
and  in  England  a  "  Joint-stock  Bank." 

4.  A  private  bank  is  usually  managed  by  one  or  more  of  th .;  partners, 
and  all  the  partners  are  styled  bankers.  A  public  bank  is  managed  by 
a  principal  officer,  who  is  usually  styled  a  manager.  It.  England,  a 
bank  manager  is  not  commonly  called  a  banker;  but  ia  Scotland,  ail 
managers  of  banks  and  managers  of  branch  banks  are  called  bankers. 
So  mind,  when  I  use  the  word  "banker,"  you  may  at.ply  it  either  to  a 
private  banker  or  to  a  bank  manager,  whichever  you  '-lease,  as  my  obser- 
vations will  be  as  applicable  to  one  as  to  the  other.  A  banker  is  a  man 
who  carries  on  the  business  of  banking  ;  and,  wh*^  ther  he  carries  it  or 

5 


50  TEN    MINUTKS'    ADVICE, 

upon  his  own  account,  or  as  the  agent  of  a  public  company,  it  ajpeara 
to  me  to  make  no  difTerence  as  to  his  claims  to  be  called  a  banker. 

5.  It  is  the  business  of  all  these  banks  to  receive  other  people's 
money,  and  return  it  upon  demand.  And  when  any  person  puts  money 
into  one  of  these  banks,  he  is  said  to  open  an  account  with  the  bank  ; 
and  when  he  has  thus  opened  an  account,  and  continues  to  put  in  and 
draw  out  money,  he  is  said  to  have  a  current  account,  or,  in  London 
phraseology,  "  to  keep  a  banker." 

6.  In  Scotland,  almost  every  man  has  an  account  of  some  sort  with  a 
bank.  The  rich  man  in  trade  has  an  account  because  of  the  facility  of 
conducting  his  operations;  the  rich  man  out  of  trade  has  an  account 
because  he  gets  interest  upon  his  lodgments,  and  he  keeps  his  money 
in  the  bank  until  he  has  an  opportunity  of  investing  it  elsewhere  at  a 
better  rate  of  interest.  The  middle  class  of  people  have  an  account 
because  of  the  convenience  of  it,  and  because  they  obtain  the  discount 
of  their  bills,  and  perhaps  loans,  on  giving  two  sureties,  which  are  called 
cash  credits.  The  poorer  classes  lodge  their  small  savings  in  the  bank, 
because  of  the  security,  and  because  they  get  interest  on  the  sums 
which  are  lodged. 

7.  But  in  London  the  practice  of  keeping  an  account  with  a  bank  is 
by  no  means  so  common  as  in  Scotland.  The  London  banks  are  banks 
only  for  the  rich.  The  bankers  require  that  every  person  opening  an 
account  shall  always  have  a  sum  to  his  credit ;  and  if  the  sum  thus 
kept  is  not  what  they  deem  sufficient,  they  will  close  the  account 
Hence  the  middle  class  of  people  in  London  have  no  banker  at  all,  and 
the  poorer  class  lodge  their  money  in  the  savings  banks,  where  they  get 
interest,  which  they  would  not  get  from  the  London  banker.  It  should 
also  be  stated  that,  besides  keeping  a  sufficient  balance,  a  party  opening 
an  account  with  a  London  banker  is  expected  to  give  a  certain  sum 
every  year  to  the  clerks.  This  is  called  Christmas  money  and  the  object 
IS  merely  to  enable  the  banker  to  pay  a  less  salary  to  his  clerks  at  the 
expense  of  his  customers. 

8.  But  within  a  few  years,  public  or  joint-stock  banks  have  been  estab- 
lished in  London.  These  banks,  or  at  least  some  of  them,  will  allow  you 
to  open  an  account  without  promising  to  keep  a  large  balance,  or  even 
any  balance  at  all,  provided  you  pay  a  small  sum  annually  as  a  com 
mission.  The  sum  is  fixed  when  you  open  the  account,  and  it  is  about 
the  same  that  you  would  be  expected  to  give  as  Christmas  money  to  the 
clerks  of  a  private  bank.  Hence,  people  of  moderate  incomes,  and  those 
who  can  employ  the  whole  of  their  capital  in  their  business,  are  now 
able  to  keep  a  banker.  These  banks,  too,  give  interest  on  deposits, 
whether  the  sums  be  large  or  small,  as  I  shall  hereafter  explain. 

9.  The  first  public  or  joint-stock  bank  established  in  London  was  (he 
London  and  the  Westminster  Bank.     This  bank  is  in  Lolhbury,  and  u 


BV    J.    W.    GILBART.  5^ 

has  branch  establishments  at  No.  1,  St.  James'  square  ;  No.  214,  iligh- 
Holborn  ;  No.  3,  Wellinmon  street,  Borough  ;  No.  87,  High  street, 
White-chapel  ;  and  No.  4,  Stratford  place,  Oxford  street.  The  success  of 
this  bank  has  led  to  the  formation  of  several  others.  You  will  observe 
that  all  banks  which  have  branches  conduct  their  business  on  the  same 
terms  at  the  branches  as  they  do  at  the  central  office. 

10.  Since,  then,  tie  Scotch  system  of  banking  is  established  in  Lon- 
don, why  should  not  the  keeping  of  a  banker  be  as  general  in  London 
as  in  Scotland?  I  hove  stated  that,  under  the  old  system,  those  chiefly 
who  were  denied  banking  facilities  were  the  middle  class  of  people. 
Now,  these  people  may  be  subdivided  into  two  classes  —  those  who  are 
engaged  in  trade,  and  those  who  are  not.  I  shall  address  myself,  in  the 
first  place,  to  the  former  class. 

11.  Now,  I  ask  you,  why  don't  you  keep  a  banker?  You  say  you 
have  been  in  business  several  years,  and  have  never  kept  one.  Of 
course,  if  no  banker  would  take  your  account,  you  could  not  do  othei- 
wise  ;  but  now  there  are  bankers  willing  to  take  your  account.  But  you 
say  you  can  do  without  a  banker.  Of  course  you  can.  The  question 
is,  not  whether  by  possibility  you  can  do  without  a  banker,  but  whethei 
you  cannot  do  better  with  one  ?  But  you  reply,  it  would  not  be  worth 
any  banker's  while  to  take  your  account.  That  is  for  his  consideration, 
not  for  yours.  The  question  for  you  to  decide  is,  not  whether  your 
keeping  a  banker  would  be  of  use  to  him,  but  whether  it  would  be  of 
use  to  yourself.     I  shall  point  out  to  you  some  of  the  advantages. 

12.  In  the  first  place,  by  keeping  a  banker,  your  money  will  be 
lodged  in  a  place  of  security.  You  have  now  i"50  or  £100,  or  perhaps 
sometimes  £200,  that  you  keep  in  your  own  house  ;  you  take  it  up  into 
your  bedroom  at  night,  and  when  you  go  out  on  a  Sunday  you  carry  it 
in  your  pocket.  Now,  you  may  lose  this  money  out  of  your  pocket  — 
the  till  may  be  robbed  by  your  servants  —  or  your  house  may  be  broken 
open  by  thieves  —  or  your  premises  may  take  fire  and  the  money  may 
be  burned.  But,  even  should  you  escape  loss,  you  cannot  escape  anx- 
iety. When  you  have  a  little  more  money  than  usual,  you  have  fears 
and  apprehensions  lest  some  accident  should  occur.  Now,  you  will 
avoid  all  this  trouble  by  keeping  a  banker. 

13.  The  banker  will  not  only  take  care  of  your  money,  but  also  of 
anything  else  you  commit  to  his  charge.  You  can  get  a  small  tin  box, 
with  your  name  painted  on  it,  and  into  this  box  you  can  put  your  will, 
the  lease  of  your  house,  policies  of  insurance,  and  any  deeds  or  other 
documents  that  require  particular  care.  You  can  send  this  box  to  your 
banker,  who  will  taive  care  of  it  for  you  ;  and  you  can  have  it  back 
whenever  you  like,  and  as  often  as  you  like.  If  your  premises  are 
insured,  it  is  clearly  improper  to  keep  the  policy  on  the  premises ;  for 


5i2  TEN  minutes'  advice, 

if  the  house  be  burned,  the  policy  will  be  burned  too ;  and  where  then  i* 
your  evidence  of  claim  upon  the  insurance  office  ? 

14.  Another  advantage  is  the  saving  of  time.  When  you  receive 
money  you  will  send  it  in  a  lump  to  the  bank ;  and  when  you  pay  away 
money  you  will  draw  checks  upon  the  bank.  Now,  to  draw  a  check 
takes  up  much  less  time  than  counting  out  the  money  that  you  have  to 
pay,  and  perhaps  sending  out  for  change  because  you  have  not  the  exact 
sum.  Besides,  you  sometimes  hold  bills  which,  when  due,  you  have  to 
send  for  payment ;  now,  you  can  lodge  these  with  your  banker,  who  will 
present  them  for  you.  And,  when  you  accept  bills,  you  will  make  them 
payable  at  your  banker's,  instead  of  making  them  payable  at  your  own 
house.  Now,  in  all  these  cases  there  is  a  great  saving  of  time  ;  and, 
besides,  your  bills,  from  being  made  payable  at  the  bank,  will  be  con- 
sidered more  respectable. 

15.  Another  advantage  of  keeping  a  banker  is,  that  it  will  be  a  check 
upon  your  accounts.  I  need  not  speak  to  you,  as  a  trader,  of  the  import- 
ance of  correct  accounts.  Your  banker's  book  will  be  an  authentic  record 
of  your  cash  transactions.  If  you  make  a  mistake  in  your  trade  books, 
the  banker's  book  will  often  lead  to  a  detection  of  the  error.  If  you  have 
paid  a  sum  of  money,  and  the  party  denies  having  received  it,  you  can 
refer  to  your  banker's  account,  and  produce  your  check,  which  is  as 
good  as  a  receipt.  By  means  of  a  banker's  account,  you  could  trace 
your  receipts  and  payments,  even  after  a  number  of  years  had  elapsed  ; 
and  hence,  disputed  accounts  could  be  readily  adjusted,  and  error,  arising 
from  forgetfulness  or  oversight,  be  speedily  rectified. 

16.  I  could  mention  several  other  reasons  why  you  should  keep  a 
banker.*  But  what  I  have  said  will  be  enough  to  induce  you  to  make  a 
trial ;  and  when  you  have  once  opened  an  account,  you  will  find  so 
much  convenience  from  it,  that  you  will  require  no  further  reasons  to 
induce  you  to  continue  it.  If  it  should  not  answer  your  expectations, 
you  can,  whenever  you  please,  close  it  again. 

17.  Now,  then,  as  you  have  made  up  your  mind  to  keep  a  banker, 
the  next  thing  is  to  determine  at  what  bank  you  will  open  your  account. 
On  this  point  I  must  leave  you  to  make  your  own  choice.  All  the 
PUBLIC  BANKS  issue  prospectuscs,  containing  a  list  of  their  directors,  the 
amount  of  their  paid-up  capital,  the  names  of  the  bankers  who  superii- 
tend  their  respective  establishments,  and  their  rules  for  transacting  busi- 
ness.    You    can   get   a   prospectus    from   each   bank,    compare    them 

*  The  reasons  assigned  here  have  a  reference  chiefly  to  London  banking. 
The  operations  of  country  hanking  are  familiarly  described  in  "The  Anatomy 
and  Philosophy  of  Ranking  ;  or,  the  true  Chi>-acter  and  Value  of  Banks  lirieflj 
explained  to  the  Middle  Classes  of  Society  By  James  Strachan."  (Groom 
bri('^e.) 


BY   J.    W.    GILBART. 


63 


together,  and  please  your  own  fancy.  But  if  you  have  no  other  groai ids 
for   preference,    I    advise  you   to  open  your  account  with  the  uank  or 

BRANCH  BANK  that  is  NEAREST  TO  YOUR  OWN  PLACE  OF  BUSINESS.      YoU  wiU 

often  have  to  go  or  send  to  the  bank,  and  if  it  be  a  great  way  off,  much 
lime  will  be  lost,  and  you  will  at  times  be  induced  to  forego  some  of  the 
advantages  of  keeping  a  banker  rather  than  send  to  so  great  a  distance. 
On  this  account,  let  your  banker  be  your  neighbor.  Recollect,  time  is 
money. 

18.  There  is  no  difficulty  in  opening  an  account.  You  will  enter  the 
bank,  and  ask  for  the  manager.  Explain  to  him  what  you  want  to  do. 
He  will  give  you  every  information  you  may  require,  and  you  will 
receive,  without  charge,  a  small  account-book,  called  a  Pass-book,  and 
a  book  of  checks.  I  advise  you  to  keep  these  two  books,  when  not  in 
use,  under  your  own  lock  and  key. 

19.  You  now  require  no  furtlier  advice  from  me,  as  your  banker  will 
give  you  the  most  ample  information  respecting  the  way  of  conducting 
your  account.  Nevertheless,  I  may  mention  a  point  or  two  for  your 
own  government :  —  Do  not  depend  entirely  upon  your  banker's  Pass- 
book, but  keep  also  an  account  in  a  book  of  your  own.  Debit  your 
banker  with  all  cash  you  may  pay  into  the  bank,  and  credit  him  for  aL 
the  checks  you  may  dfaw  at  the  time  you  draw  them.  Send  your 
Pass-book  frequently  to  be  made  up  at  the  bank,  and,  when  it  returns, 
always  compare  it  with  your  account-book.  This  will  correct  any  mis- 
take in  the  Pass-book.  Besides,  some  of  your  checks  may  not  be  pre- 
sented for  payment  until  several  days  after  they  are  drawn,  and  if,  in 
the  mean  time,  you  take  the  balance  of  the  banker's  Pass-book,  you  will 
seem  to  have  more  ready  cash  than  you  actually  possess,  and  this  may 
lead  you  into  unpleasant  mistakes. 

20.  When  you  lodge  any  money  at  the  bank,  always  place  the  total 
amount  of  the  cash,  and  your  name,  at  full  length,  upon  the  outside  of 
the  parcel,  or  on  a  slip  of  paper.  The  cashier  will  then  see  at  once  if 
he  agrees  with  your  amount.  This  will  save  time,  and  prevent 
mistakes. 

21.  Be  always  open  and  straightforward  with  your  banker.  Do  not 
represent  yourself  to  be  a  richer  man  than  you  are ;  do  not  discount 
with  your  banker  any  bills  that  are  not  likely  to  be  punctually  paid 
when  due  ;  and,  should  any  be  unpaid  and  returned  to  you,  pay  them 
yourself  immediately.  Do  not  attempt  to  overdraw  your  account ;  that 
is,  do  not  draw  checks  upon  your  banker  for  more  money  than  you  have 
m  his  hands,  without  first  asking  his  consent ;  and  if  you  make  him 
any  promises,  be  sure  that  they  be  strictly  performed.  If  you  fail  once, 
the  banker  will  hesitate  before  he  trusts  you  again. 

22.  Should  you  be  dissatisfied  with  anything  connected  with  your 
acjount,  make  your  complaint  to  the  banker  himself,  and  not  to  the 

5* 


54  TEN  minutes'  advice, 

clerks.  Let  all  your  communications  be  made  in  person,  rither  than 
by  LETTER.  But  do  not  stay  long  at  one  interview.  Make  no  observa- 
tions about  the  weather  or  the  news  of  the  day.  Proceed  at  once  to  the 
business  you  are  come  about,  and,  when  it  is  settled,  retire.  This  will 
save  3'our  banker's  time,  and  give  him  a  favorable  impression  of  your 
character  as  a  man  of  business. 

23.  If  you  are  in  partnership,  besides  opening  an  account  with  your 
banker  in  the  names  of  the  firm,  you  should  open  a  private  account  fol 
yourself,  that  your  personal  affairs  may  be  kept  separate  from  those  of 
the  partnership.  Or,  if  you  are  in  an  extensive  way  of  business,  and 
have  a  large  family,  it  is  advisable  that  you  open  a  separate  accoun'j 
with  your  banker,  in  the  name  of  your  wife,  that  3'our  trade  payments 
and  your  household  expenses  may  not  be  mixed  up  together  in  the  same 
account.  This  is  a  good  way  of  ascertaining  the  exact  amount  of  your 
family  expenditure. 

24.  If  you  are  appointed  executor  or  assignee  to  an  estate,  or  become 
treasurer  to  a  public  institution  or  charitable  society,  open  a  separate 
account  with  your  banker  for  this  office,  and  do  not  mix  other  people's 
moneys  with  your  own.  This  will  prevent  mistakes  and  confusion  in 
your  accounts.  These  separate  accounts  may  be  kept  still  more  distinct 
by  being  opened  with  another  banker,  or  at  another  branch  of  the  same 
bank. 

25.  There  are  a  good  many  of  the  middle  class  of  people  who  are  not 
in  trade,  and  I  must  now  address  them.  Perhaps  you  are  a  clergyman, 
or  a  medical  man,  or  you  are  in  a  public  office,  or  are  living  on  your 
rents  or  dividends.  At  all  events,  whatever  you  may  be,  I  conclude 
you  are  not  living  beyond  your  means.  If  you  are,  I  have  not  a  word 
to  say  to  you  about  keeping  a  banker ;  you  will  soon,  most  likely,  be 
within  the  keeping  of  a  jailor. 

26.  Several  of  the  reasons  I  have  given  to  the  trader  will  also  apply 
to  you  ;  but  there  is  one  that  applies  with  much  greater  force  —  the  tend- 
ency to  insure  accurate  accounts.  As  you  are  not  a  man  of  businesj, 
I  shall  not  advise  you  to  keep  an  account  of  your  receipts  and  expendl 
tures.  I  know  you  will  do  no  such  thing.  Should  you  ever  comrneneo 
to  do  so,  you  will  get  tired  before  the  end  of  the  year,  and  throw  the 
book  as  de.  Now,  if  you  keep  a  banker,  he  will  keep  your  accounts  for 
you  ;  his  Pass-book  will  show  you  the  state  of  your  accounts.  All  the 
money  you  receive  you  must  send  to  the  bank,  and  all  your  payment.s 
must  be  made  by  checks  upon  the  bank.  If  you  want  pocket-nioney, 
draw  a  check  for  £5  or  £20,  payable  to  cash,  but  by  no  means  disburse 
any  money  but  through  your  banker.  Your  book  will  be  balanced 
every  half  year.  You  will  then  see  the  total  amount  of  your  receipts 
during  the  half-year,  and  your  various  payments  to  the  butcher,  the 
baker,  the  tailor,  &,c.,  ike.     The  names  to  which  the  checks  are  made 


BY    J.    W.    GILBART.  5t 

pj  yablo  will  show  for  what  purpose  ihey  were  given,  and  you  saould 
wiite  these  names  in  a  jilain  hand,  that  the  clerks  may  copy  them  cor- 
rectly in  the  Pass-book.  Now,  if  you  look  through  your  book  once 
every  half  year  in  this  way,  you  will  probably  see  occasion  to  introduce 
some  useful  reforms  into  your  domestic  expenditure.  Bui  if  you  are  too 
lazy  to  do  this,  hand  the  book  to  your  wife,  and  she  will  do  it  for  you. 

27.  I  shall  now  address  another  class  of  people.  Perhaps  you  are  a 
clerk,  or  a  warehouseman,  or  a  shopman,  or  a  domestic  servant.  Well, 
you  have  no  occasion  to  keep  a  banker  ;  that  is,  you  have  no  occasion  to 
open  a  current  account.  But  you  have  got  a  little  money  which  you 
would  like  to  put  into  some  safe  place,  and  upon  which  you  would  like 
to  receive  interest.     Well,  now,  listen  to  me. 

28.  If  the  sura  be  under  £10,  or  if  the  sum  be  above  £10,  and  you  are 
not  likely  to  want  it  soon,  put  it  into  the  savings  bank  ;  and  you  will 
receive  interest  for  it  at  the  rate  of  about  £3  for  every  £100  for  a  year. 
But  mind,  you  can  only  put  money  into  the  savings  bank  at  certain  hours 
in  the  week,  when  the  bank  is  open,  and  you  cannot  put  in  more  than 
£30  in  any  one  year,  nor  more  than  £150  altogether,  and  you  will 
receive  no  interest  fur  the  fractional  parts  of  a  month,  and  you  cannot 
draw  out  any  money  without  giving  notice  beforehand. 

29.  If,  then,  your  money  is  more  than  £10,  and  you  have  already 
lodged  £30  this  year  in  the  savings  bank,  or  £150  altogether,  or  if  you 
will  have  occasion  to  draw  out  your  money  without  giving  notice,  then 
lodge  it  in  one  of  the  public  banks.  These  banks  are  open  every  week- 
day from  nine  o'clock  in  the  morning  till  four  in  the  evening ;  they  will 
take  lodgments  of  money  to  any  amount,  and  interest  will  be  allowed 
from  the  day  it  is  lodged  until  the  day  it  is  drawn  out ;  and  if  the  sum 
is  under  £1,000  no  notice  is  required.  For  all  sums  lodged  on  interest, 
the  bankers  give  receipts  called  deposit  receipts. 

30.  When  you  go  to  the  bank  to  lodge  upon  interest  any  sum  under 
£1,000,  you  need  not  inquire  for  the  manager.  Hand  your  money  to 
any  clerk  you  may  see  standing  inside  of  the  counter,  and  ask  for  a 
deposit  receipt.  You  will  be  requested  (the  first  time  you  go)  to  write 
your  name  and  address  in  a  book  which  is  kept  for  that  purpose,  and 
then  the  deposit  receipt  will  be  given  to  you  without  any  delay. 

31.  Mind,  this  deposit  receipt  is  not  transferable  ;  that  is,  you  cannot 
lend  it  or  give  it  to  anybody  else.  When  you  want  the  money,  you  mu.si 
take  it  yourself  to  the  bank,  and  ask  the  cashier  to  pay  you  the  amount. 
You  will  then  be  requested  to  write  your  name  on  the  back  of  the 
deposit  receipt  ;  the  casliier  will  see  that  the  signature  corresponds  with 
the  signature  you  wrote  in  the  book  when  you  lodged  the  money,  and 
will  then  pay  you  the  amount,  and  keep  the  receipt. 

32.  Although  you  cannot  lodge  upon  a  deposit  receipt  a  less  sum  in 
the  first  instance  than  £10,  yet,  having  lodged  that  sum,  you  can  make 


06  TEN    minutes'    ADVICE. 

any  additions  to  it  you  please.  Thus,  if  you  wish  to  lodge  £5  morei 
you  can  take  your  £5  note  and  your  deposit  receipt  for  £10  to  the  bank, 
and  get  a  new  receipt  for  £15.  If,  after  having  lodged  £10,  you  wish  to 
lodge  £10  more,  you  can  get  a  separate  receipt  for  the  second  £10,  oi 
have  a  new  receipt  for  £20,  whichever  you  please  ;  and  observe,  when- 
ever  any  addition  is  made  to  a  former  receipt,  the  old  receipt  is  cancelled 
and  the  interest  due  upon  it  is  either  paid  to  you  in  money,  or  added  to 
the  amount  of  the  new  receipt,  as  may  be  most  agreeable  to  yourself. 

33.  The  interest  allowed  you  at  the  bank  will  at  present  be  at  the  rate 
of  2  per  cent.;  that  is  to  say,  after  the  rate  of  £2  upon  every  £100  for 
a  year. 

34.  Upon  sums  above  £1,000  the  interest  allowed  is  sometimes  more 
and  sometimes  less  than  2  per  cent.,  according  to  the  value  of  money; 
that  is,  according  to  the  rate  at  which  the  bankers  can  employ  it  again  ; 
and  a  few  days'  notice  is  usually  required  before  the  money  is  with- 
drawn ;  but,  upon  sums  under  £1,000,  the  rate  of  interest  varies  less  fre 
queiitly,  and  they  are  always  repayable  upon  demand. 

35.  You  will  be  surprised  to  find  how  the  desire  of  lodging  money  in 
a  bank  will  grow  upon  you.  When  you  had  the  money  in  your  pocket, 
you  were  anxious  to  find  reasons  for  spending  it.  When  you  have 
placed  it  in  the  bank,  you  will  be  anxious  to  find  reasons  for  not  spend- 
ing it.  All  habits  are  formed  or  strengthened  by  repeated  acts.  The 
more  money  you  ledge  in  the  bank,  the  more  you  will  desire  to  lodge. 
You  will  go  on  ma.-cing  additions,  until,  at  last,  you  will  probably  have 
acquired  a  sum  thf  t  shall  lay  the  foundation  of  your  advance  to  a  highn 
station  ia  society. 


ALPHABETICAL    INDEX 

TO  THE  SUBJECTS  CONTAINED  IN 

A  TREATISE    ON    BANKING,    BY    A.    B.    JOHNSON,"    AND    "  TEN  MINUTES 
ADVICE    ON    KEEPING    A    BANKER,  BY    J.  W.  GILBART." 

Page 

Acceptances  in  advance  of  Consignments, 32 

Banker  (the),  duties  and  reiiuisites  of,  .   . *° 

his  primary  objects  in  the  prosperity  of  his  Bank 29 

should  acquaint  himself  with  the  circumstiinces  of  his  dealers, 39 

should  know  the  signatures  of  his  dealers, 40 

_ should  k[iow  the  residences  of  endorsers 41 

should  know  the  pecuniary  position  of  his  Bank, 42 

prospective  resources  of, 4« 

should  never  promise  prospective  loans, 42 

should  be  wary  of  recommendations, 47 

his  adherence  to  good  principles 44 

slmuld  beware  of  persuasion  and  of  speculators, -14 

should  keep  independent  of  his  debtors, 45 

should  be  governed  by  his  own  judgment, 47 

description  of,  by  J.  W.  Gilbart 49 

Banks.     Profits  from  Bank  Notes  and  Deposits, 8 

.     Relative  utility  of  Safety  Fund  and  Free, IC 

of  New  York,  aggregate  Capital, 8 

,  large  and  small,  relative  productiveness  of, !•'' 

,  on  the  gains  of, 34 

,  the  general  supervision  of, • 43 

,  general  use  of,  in  Scotland, 50 

Bank  Dividends,  average  rate  for  three  years, 9 

Notes,  benefits  to  tlie  public  from  llie  use  of, 9 

,  loss  to  the  public  from  insolvent, 11 

Circulation,  Deposits,  and  liOans.  equally  extinguished, 13 

_  not  wholly  redeemable  in  specie 18 

,  increased  by  spirit  of  speculation, 22 

Suspensions,   how  produced, 19 

Loans  to  be  regulated  by  prospective  wants, 33 

Circulation  and  Deposits  expand  together, • 22 

,  prospective  resources  of, 42 

Loans,  regulated  by  habits,  &c.,  of  the  borrower 31 

Banking,  objects  of, 28 

,  economy  in,  recommended, 45 

in  London, ^ 

Business  of  the  State  diminished  by  a  contracted  currency, 17 

,  a  guarantee  for  currency, 1^ 

Capital,  always  withdrawn  during  a  panic. 24 

r-ty  and  Country  Commerce,  as  affected  by  the  Banks, 14 

Collections  within  the  State 2b 

out  of  the  State 26 

rk)untry  Banks,  how  affected  by  the  city  pressure,  .   .       .  • 24 


5S  ALPHABETICAL    INDEX. 

Pnge 

Currency  of  the  Stale  of  New  York, 16 

,  a  measure  of  the  business  of  the  Slate 16 

,  not  contracted  by  business,  diminished, 17 

,  excess  of,  cannot  lasl  long, 17 

,  National,  receivable  for  taxes,  duties,  &c., 20 

,  expansions  of,  how  produced, 21 

,  contractions  of, 22 

,  periodical, 23 

Customers  should  be  straight-forward  Willi  their  bankers, 53 

Debtors.     Security  founded  on  the  morality  of, 31 

.    Security  founded  on  the  habits  of, 31 

.    Security  founded  on  the  business  of, 32 

Dividends.     Insufficient  to  make  bank  capilal  desirable  property, 9 

Dummies,  paper  of  should  be  avoided, 33 

Economy  in  Banking  recommended 45 

in  the  use  of  a  Bank  by  traders 51 

Exchange,  profits  on  the  sale  of  by  Banks, 25 

Endorsers,  two  usually  required  in  the  country, 30 

Extravagance  of  borrowers,  to  be  considered, 31 

Free  Banks  in  New  York,  policy  of, 14 

Interest.     Laws  of,  in  New  York, "^ 

Interests  of  debtors  subordinate  to  those  of  the  Bank 30 

Kiting,  sometimes  resorted  to  by  borrowers, 33 

Legal  Tender,  how  affected  by  statutes 20 

Loans,  founded  on  incidental  circulation, 35 

,  founded  on  the  place  of  repayment, 36 

,  founded  on  sale  of  exchange 37 

,  founded  on  a  commission  for  their  collection 37 

,  founded  on  the  time  they  are  to  endure 38,39 

London,  banking  in, 


50 


JModeration,  to  be  observed  in  the  business  of  Banks 34 

Moral  Security  should  be  considered,  in  loans, 31 

Morality  of  a  Debtor,  security  founded  on, .   .   .  31 

New  York  Safety  Fund  Banking  System, 12 

and  Free  Banks,  compared, .   ,   ,   12,  14 

New  York  Safety  Fund  Banks.  Legal  Privileges  of, 15 

Offerings  for  Discount,  character  of 32 

Overdrafts,  equivalent  to  loans  without  endorsers »       ....  43 

Partnership  Accounts,  should  lie  kept  separate  from  individual  accounts, 54 

Pressures  upon  Banks,  periodical 23 

,  increase  with  a  compound  progression, 24 

_____ ,  commence  in  large  cities, 24 

_ ,  of  the  interior, 24 

,  termination  of  succeeded  by  expansion, 25 

. ,  loans,  with  reference  to, 39 

Redemptions,  speedy,  desired  by  Brokers, 23 

Risks  on  Loans,  not  charged  for, 3( 

Specie  Shipments  productive  of  pressure, 2d 

Suspended  paper,  payment  of  should  be  enforced, 43 

Suspansion  of  specie  payments,  how  produced, IS 


-,  never  necessary, 


Trea.sury  Notes  and  Receivables 20 

or 

Usurious  Notes  and  Drafts, •'^ 


SECOND   PART. 


Pag: 
I.    Extracts  from  the  Law  of  Bills  of  Exchange.      By  John 

Barnard  Byles,  author  of  a  "Treatise  on  the  Law  of  Bills  of 

Exchange,    Promissory    Notes,    Bank    Notes,    Bankers'    Cash 

Notes  and  Checks," 60 


IL   Remarks  on  Bills  of  Exchange.      By  John  Ramsey  McCul- 

loch,  author  of  "  The  Dictionary  of  Commerce,"  &c.,      .  .     83 


ill.  Forms  of  Bills  of  Exchange  in  the  French,  German, 
Dutch,  Italian,  Spanish,  Portuguese,  and  Swedish  Lan 
GUAGES, 93 


JV     Forms  of  Notice  of  Protest  ;  with  Remarks, 91 


V.  Synopsis  of  the  Bank  Laws  of  Massachusetts,  in  force 
January,  1851.  —  1.  Banks. — 2.  Bank  Notes.  —  3.  Cash- 
iers and  other  Officers. — 4.  Directors. — 5.  Forgery. 
—  6.  Interest.  — 7.  Promissory  Notes.  —  8.  Stockhold- 
ers.—  9.  Notaries  Public.  —  10.  Bank  Commissioners. — 
11.  Miscellaneous.  —  12.  Decisions  of  the  Supreme  Judi- 
OI4  L  Court  of  Massachusetts  in  reference  to  Banks,  &c.,  If 


THE  LAW   OF  BILLS   OF  EXCHANGE. 

BY  JOHN  BARNARD  BYLES, 

AUTHOR    OF    A    TREATISE    ON    BILLS    OF    EXCHANGE. 


L  — HISTORY  OF    BILLS  OF    EXCHANGE. 

There  is  no  vestige  of  the  existence  of  Bills  of  Exchange  among  the 
ancients,  and  the  precise  period  of  their  introduction  is  somewhat  con- 
troverted. It  is,  however,  certain  that  they  were  in  use  in  thj  four 
teenth  century,  though  we  find  in  our  English  law-books  no  decision 
relating  to  them  earlier  than  the  reign  of  James  the  First. 

It  is  probable  that  a  bill  of  exchange  was,  in  its  origii  al,  nothing 
more  than  a  letter  of  credit  from  a  merchant  in  one  country,  to  his 
debtor,  a  merchant  in  another,  requesting  him  to  pay  the  debt  to  a  third 
person,  who  carried  the  letter,  and  happened  to  be  travelling  to  the 
place  where  the  debtor  resided.  It  was  discovered,  by  experience,  that 
this  mode  of  making  payments  was  extremely  convenient  to  al'  parties  : 
—  to  the  creditor,  for  he  could  thus  receive  his  debt  without  trouble, 
risk,  or  expense  —  to  the  debtor,  for  the  facility  of  payment  Avas  an  equal 
accommodation  to  him,  and  perhaps  drew  al"ter  it  facility  of  credit  —  to 
the  bearer  of  the  letter,  who  found  himself  in  funds  in  a  fofviign  coun- 
try, without  the  danger  and  incumbrance  of  carrying  specie.  At  first, 
perhaps,  the  letter  contained  many  other  things  beside  the  order  to  give 
credit.  But  it  was  found  that  the  original  bearer  might  often  with 
advantage  transfer  it  to  another.  The  letter  was  then  disencumberec 
of  all  other  matter  ;  it  was  opened  and  not  sealed,  and  the  page  on  which 
it  was  written  gradually  shrunk  to  the  slip  now  m  use.  The  assignee 
■was,  perhaps,  desirous  to  know  beforehand  whether  the  party  to  whom 
it  was  addressed  would  pay  it,  and  sometimes  showed  it  to  him  for  that 
purpose  ;  h:<;  promise  to  pay  was  the  origin  of  acceptances.  These  let- 
ters or  bills,  'tie  representatives  of  debts  due  in  a  foreign  country,  were 
sometimes  more,  sometimes  less,  in  demand  ;  they  became,  by  degrees, 
articles  of  traffic  ;  j.nd  the  present  complicated  and  abstruse  practice  and 
theory  of  exchange  was  gradually  formed. 

Upon  their  introduction  into  our  own  country,  other  conveniences,  as 
preal-as  in  international  transactions,  were  found  to  attend  tliem.  They 
otferrd  an  easv  and  most  effect uai  expedient  for  eluding  the  stubborn  rule 


HISTORY    OF    BILLS    OF    EXCHANGE.  01 

©f  the  common  law,  that  a  debt  is  not  assignable;  furni.iing  the 
assignee  with  an  assignment  binding  on  the  original  creditor,  capable 
of  being  ratified  by  the  debtor,  perhaps  guaranteed  by  a  series  of  respon- 
sible sureties,  and  assignable  still  further,  ad  infinitum.  Not  only  did 
these  simple  instruments  transfer  value  from  place  to  place,  at  home  or 
abroad,  and  balance  the  accounts  of  distant  cities  without  the  transmis 
sion  of  money  ;  not  only  did  they  assign  debts  in  the  most  convenient, 
extensive,  and  effectual  manner;  but  the  value  of  a  debt  was  improved 
by  being  authenticated  in  a  bill  of  exchange,  for  it  was  thus  reduced  to 
a  certain  amount,  which  the  debtor,  having  accepted,  could  not  afterwards 
unsettle ;  evidence  of  the  original  demand  was  rendered  unnecessary, 
and  the  bill  afforded  a  plainer  and  more  indisputable  title  to  the  whole 
debt.  A  creditor,  too,  by  assigning  to  a  man  of  property  a  bill  at  a  long 
date,  given  him  by  his  debtor,  could  obtain,  for  a  trifling  discount,  his 
money  in  advance.  Credit  to  the  buyer  was  thus  rendered  consistent 
with  ready  money  to  the  seller,  and  the  reconciliation  of  the  apparent 
inconsistency  was  brought  about  by  a  further  benefit  to  a  third  person, 
for  it  was  effected  by  advantageously  employing  the  surplus  and  idle 
funds  of  the  capitalist.  At  the  first  introduction  of  bills  of  exchange, 
however,  the  English  courts  of  law  regarded  them  with  a  jealous  and 
evil  eye,  allowing  them  only  between  merchants ;  but  their  obvious 
advantages  soon  compelled  the  judges  to  sanction  their  use  by  all  per- 
sons ;  and  of  late  years  the  policy  of  the  Bench  has  been  industriously 
to  remove  every  impediment,  and  add  all  possible  facilities  to  these 
wheels  of  the  vast  commercial  system. 

The  advantages  of  a  bill  of  exchange,  in  reducing  a  debt  to  a  certain- 
ty, curtailing  the  evidence  necessary  to  enforce  payment,  and  affording 
(he  means  of  procuring  ready  money  by  discount,  often  induced  cred- 
itors to  draw  a  bill  for  the  sake  of  acceptance  ;  though  there  might  be 
no  intention  of  transferring  the  debt.  Such  a  transaction  pointed  out 
the  way  to  a  shorter  mode  of  effecting  the  same  purpose  by  means  of  a 
promissory  note.  Promissory  notes  soon  circulated  like  bills  of  ex- 
change, and  became  as  common  as  bills  themselves.  Notes  for  small 
sums,  payable  to  bearer  on  demand,  were  found  to  answer  most  pur- 
poses of  the  ordinary  circulating  medium,  and  have,  at  length,  in  all 
civilized  countries,  supplanted  a  great  portion  of  the  gold  and  silver 
previously  in  circulation.  Great,  however,  as  was  the  saving,  and 
numerous  the  advantages  arising  from  the  substitution,  it  was  discov- 
ered by  experience  that  the  dangers  &nd  inconveniences  of  an  unlimited 
issue  of  paper  money  were  at  least  as  great.  The  legislature  have, 
therefore,  found  it  necessary  to  place  the  issue  of  negotiable  notes  for 
small  sums  under  the  restrictions  which  have  been  pointed  out  else- 
where ;  and  experience  has  proved  that  the  only  mode  of  jjreserving 
paper  money  on  a  level  with  gold,  is  to  compel  the  ulterers  to  exchange 
6 


62  BYLES    ON    BILLS    OF    EXCHANGE. 

It  lor  gold,  at  the  option  of  the  holder.  And  peradventure,  even  then, 
unless  the  State  controls  the  issue  of  paper,  on  principles  imperfectly 
understood  at  present,  the  value  of  the  whole  circulating  medium  may 
decline  together,  as  compared  with  other  commodities  or  the  currency 
of  foreign  countries,  and  the  precious  metals  may  in  consequence  leave 
the  kingdom.  This  consequence  does  not  appear  to  have  been  foreseen 
by  the  late  Mr.  Ricardo. 

During  the  suspension  of  cash  payments  and  tne  circulation  of  one 
pound  notes,  nearly  every  payment  in  this  country  was  made  in  paper. 
And  some  idea  may  be  formed  of  the  immense  amount  of  property  even 
now  atluat  in  bills  and  notes,  when  it  is  considered  that  all  payments  foi 
our  immense  exports  and  imports,  almost  every  remittance  to  and 
from  every  quarter  of  the  world,  nearly  every  payment  of  large  amount 
between  distant  places  in  the  kingdom,  and  a  large  proportion  of  pay- 
ments in  the  same  place,  are  made  through  the  intervention  of  bills ; 
not  to  mention  the  amount  of  common  promissory  notes,  at  long  and 
short  dates,  and  the  notes  of  the  Bank  of  England  and  country  banks. 
It  will  not,  perhaps,  be  an  unreasonable  inference  that  the  bills  and  notes 
of  all  kinds,  issued  and  circulated  in  the  United  Kingdom  in  the  space 
of  a  single  year,  amount  to  many  hundred  millions,  and  that  this  spe- 
cies of  property  is  now,  in  aggregate  value,  inferior  only  to  the  land  or 
funded  debt  of  the  kingdom. 

This  deduction  is  fully  supported  by  the  returns  of  the  Stamp  Office. 
The  net  produce  of  the  stamps  on  bills  of  exchange  and  promissory  notes 
in  Great  Britain  alone,  for  the  year  ending  on  the  5th  January,  1828, 
was  £578,654  4s.  5d.  Now,  supposing  that  the  gross  amount  received 
for  stamps  amounted  to  1^600,000, — an  estimate,  in  all  probability, 
considerably  below  the  truth,  —  and  that  the  stamp  is,  upon  an  average, 
4s.  per  cent,  on  the  value  of  the  instrument,  (for,  though  it  is  more  on 
small,  it  is  less  on  large  sums,)  the  value  of  the  bills  and  notes  stamped 
in  a  single  year  will  be  three  hundred  millions.  The  amount  circulated 
must  be  considerably  more,  for  in  this  calculation  are  not  included  any 
bills  drawn  abroad,  or  in  Ireland,  and  a  further  allowance  is  to  be  made 
for  instruments  of  more  than  twelve  months'  date,  and  for  all  reissuable 
notes.  I  presume  the  above  return  includes  the  composition  in  lieu  of 
stamp  duties  paid  by  the  governor  and  company  of  the  Bank  of  Eng- 
land. The  weekly  average  amount  of  Bank  of  England  notes  and  bank 
post  bills  in  circulation  for  the  year  preceding  April  6,  1828,  wa- 
£21,549,318  10s. ;  in  1848-9,  about  eighteen  millions  sterling. 

Simple  as  a  bill  or  note  may  in  form  appear,  the  rights  and  liabilities 
of  the  different  parties  to  those  instruments  have  given  rise  to  an  infinity 
of  legal  questions  and  multitudes  of  decisions.  A  striking  proof  of  what 
the  experience  of  all  ages  had  already  made  abundantly  manifest  —  that 
law  is,  in  its  own  nature,  necessarily  voluminous ;  that  its  complexity 


HISTORY    OF    BILLS    OF    EXCHANGE.  63 

and  bulk  constitute  the  price  that  must  be  paid  for  the  reign  of  certainty, 
order,  and  uniformity  ;  and  that  any  attempt  to  regulate  multiforre 
combinations  of  circumstances,  by  a  few  general  rules,  however  skil- 
fully  constructed,  must  ^n  abortive. 

In  France  this  subjeti  nas  been  briefly  but  most  luminously  treated 
by  M.  Pothier,  a  learnec  civilian  of  the  last  century,  whose  work,  as 
well  as  his  other  performances,  and  in  particular  the  Traite  des  Obllga- 
tiont,  evinces  a  profound  acquaintance  with  the  principles  of  jurispru- 
dence, and  extraordinary  acumen  and  sagacity  in  their  application ;  the 
result  of  the  laborious  exercise  of  his  talents  on  the  Roman  law.  Tliere 
cannot  be  a  greater  proof  of  the  surpassing  merit  of  his  works,  than  that, 
after  the  lapse  of  more  than  half  a  century,  and  a  stupendous  revolu- 
tion in  all  the  institutions  of  his  country,  many  parts  of  his  writ- 
ings have  been  incorporated,  word  for  word,  in  the  new  code  of  France. 
The  Traife  du  Contrat  de  Change  is  often  cited  in  the  English  Courts  of 
Law.  "  The  authority  of  Pothier,"  says  the  present  learned  Chief  Jus- 
tice of  the  Common  Pleas,  "  is  as  high  as  can  be  had,  next  to  the  decis- 
ion of  a  Court  of  Justice  in  this  country  ;  his  writings  are  considered,  by 
Sir  William  Jones,  as  equal,  in  point  of  luminous  method,  apposite  ex- 
amples, and  a  clear,  manly  style,  to  the  works  of  Lyttleton  on  the  Laws 
of  England." 

In  Great  Britain,  the  growth  of  the  law  on  bills  and  notes  has  been 
almost  proportionate  to  the  increase  of  those  instruments ;  insomuch 
that  within  the  last  sixty  years  the  reported  decisions  upon  them,  in  law, 
equity  and  bankruptcy,  would  fill  many  volumes.  Numerous  have  been 
the  attempts  to  reduce  the  mass  of  authorities  to  the  shape  of  a  regular 
treatise;  but  amongst  all  these,  two  only  (by  Englishmen)  are  now  in 
common  use  in  the  profession,* — the  treatise  of  Mr.  Chitty,  and  the 
summary  of  Mr.  Justice  Bayley. 

Mr.  Chitty's  treatise  is  a  laborious  and  full  collection  of  almost  all  the 
cases,  by  an  eminent  counsel,  the  extent  of  whose  legal  acquirements, 
and  the  readiness  of  their  application,  can  only  be  appreciated  by  those 
who  have  been  in  the  habit  of  personal  intercourse  with  him.  But  the 
size  of  the  book  is  an  objection  with  many,  and  a  cloud  of  author.t'.es 
will  sometimes  obscure  the  most  luminous  arrangement. 

*  To  which  we  may  add,  Story  on  Bills,  a  work  now  in  high  repute  in  ooth 
Great  Britain  and  the  United  Slates.  —  American  Editor. 


11.  — OF  PRESENTMENT  FOR  ACCEPTANCE. 

Advisable  in  all  Cases.  —  Necessary/  where  Bill  is  drawn  at  or  after  sight 
When  to  be  made.  —  At  what  Hour.  — Excused  by  putting  Bill  in  Circula- 
tion. —  Or  by  other  reasonable  Cause.  —  To  whom  it  should  be  made.  — 
What  Time  may  be  given  to  the  Drawee.  —  Consequence  of  Negligence  in 
Party  presenting.  —  Proper  Course  for  Holder  when  Drawee  cannot  be 
found,  or  is  Dead.  —  Pleading. 

It  is  in  all  cases  advisable  for  the  holder  of  an  unaccepted  bill  to  pre- 
sent it  for  acceptance  without  delay ;  for,  in  case  of  acceptance,  the 
holder  obtains  the  additional  security  of  the  acceptor,  and,  if  accept 
ance  be  refused,  the  antecedent  parties  become  liable  immediately.  It 
is  advisable,  too,  on  account  of  the  drawer,  for,  by  receiving  early 
advice  of  dishonor,  he  may  be  better  able  to  get  his  effects  out  of  the 
drawee's  hands. 

But  presentment  for  acceptance  is  not  necessary  in  the  case  of  a  bill 
payable  at  a  certain  period  after  date.  It  is  said,  however,  that  it  is 
incumbent  on  a  holder  who  is  a  mere  agent,  and  on"  the  payee,  when 
expressly  directed  by  the  drawer  so  to  do,  to  present  the  bill  for 
acceptance  as  soon  as  possible;  and  that,  for  loss  arising  from  the 
neglect,  the  payee  must  be  responsible,  and  the  agent  must  answer  to  his 
principal. 

Presentment  for  acceptance  is  necessary,  if  the  bill  be  drawn  payable 
at  sight,  or  at  a  certain  period  after  sight.  Till  such  presentment  there 
is  no  right  of  action  against  any  party ;  and  unless  it  be  made  within 
a  leasonable  time,  the  holder  loses  his  remedy  against  the  antecedent 
patties. 

What  is  a  reasonable  time,  depends  on  the  circumstances  of  each  par- 
ticular case,  and  is  a  mixed  question  of  law  and  fact ;  although  r^^ason 
able  time  in  general,  and  reasonable  time  for  giving  notice  of  dishonor 
in  particular,  is  clearly  a  question  of  law.  Plaintiff,  on  Friday,  the  9th, 
at  Windsor,  twenty  miles  from  London,  received  a  bill  on  London,  at 
one  month  after  sight,  for  £100.  There  was  no  post  on  Saturday.  Il 
was  presented  on  the  Tuesday.  The  jury  thought  it  was  presented 
w  itliin  a  rea.sonable  time,  and  the  Court  concurred. 

A  bill  drawn  by  bankers  in  the  country  on  their  correspondents   .a 


OF  PRESENTMENT  FOR  ACCEPTANCE.  65 

London,  payable  after  sight,  was  endorsed  to  the  traveller  ot  he  plain- 
lifl's.  He  traiisiiiittt'd  it  to  the  plaiiititls  after  the  interval  of  a  week,  and 
Ihcy,  two  days  afterwards,  transmitted  it  for  acceptance.  Before  it  was 
presented  to  the  drawees,  the  drawer  had  become  bankrupt ;  the  draw- 
ees,  consequently,  refused  to  accept.  Had  the  bill  been  sent  by  the 
traveller  to  the  plamtifTs,  his  employers,  as  soon  as  he  received  it,  they 
would  have  been  able  to  get  it  accepted  before  the  bankruptcy.  "  This 
is,"  says  Lord  Tenterden,  "  a  mixed  question  of  law  and  fact ;  and,  in 
expressing  my  own  opinion,  I  do  not  w'ish  at  all  to  withdraw  the  case 
from  the  jury.  Whatever  strictness  may  be  required  with  respect  to 
common  bills  of  exchange,  payable  after  sight,  it  does  not  seem  unrea- 
sonable to  treat  bills  of  this  nature,  drawn  by  bankers  on  their  corre- 
spondents, as  not  requiring  immediate  presentment,  but  as  being  retain 
able  by  the  holders  for  the  purpose  of  using  them,  within  a  moderate 
time,  (for  indefinite  delay,  of  course,  cannot  be  allowed,)  as  part  of  the 
circulating  medium  of  the  country."  The  jury  concurred  with  his  lord- 
ship, that  the  delay  was  not  unreasonable.  Where  the  purchaser  of  a 
bill  on  Rio  Janeiro,  at  sixty  days'  sight,  the  exchange  being  against 
him,  kept  it  nearly  five  months,  and  the  drawee  failed  before  present- 
ment, it  was  held  that  the  delay  was  not  unreasonable.  "  The  bill," 
says  Tindal,  C.  J.,  "  must  be  forwarded  within  a  reasonable  time  under 
all  the  circumstances  of  the  case,  and  there  must  be  no  unreasonable  or 
improper  delay.  Whether  there  has  been,  in  any  particular  case, 
reasonable  diligence  used,  or  whether  unreasonable  delay  has  occurred, 
is  a  mixed  question  of  law  and  fact,  to  be  decided  by  the  jury  acting 
under  the  direction  of  the  judge,  upon  the  particular  circumstances  of 
each  case." 

But  where  a  bill,  payable  after  sight,  was  drawn  in  duplicate  on  the 
12th  of  August,  in  Newfoundland,  and  not  presented  for  acceptance  in 
London  till  November  16th,  and  no  circumstances  were  proved  to  excuse 
the  delay,  it  was  held  unreasonable,  the  Court  laying  some  stress  on  the 
fact  that  the  bill  was  drawn  in  sets. 

Presentment  should  be  made  during  the  usual  hours  of  business. 

The  holder  may,  however,  put  the  bill  into  circulation  without  pre- 
senting it.  "  If  a  bill,  drawn  at  three  days'  sight,"  says  Mr.  Justice 
Buller,  "be  kept  out  in  circulation  for  a  year,  I  cannot  say  that  there 
would  be  laches  ;  but  if,  instead  of  putting  it  into  circulation,  the  holder 
were  to  lock  it  up  for  any  length  of  time,  I  should  say  that  he  would 
be  guilty  of  laches."  "  But  this  cannot  mean,"  says  Tindal,  C.  J., 
'•  that  keeping  it  in  hand  for  any  time,  however  short,  would  make  him 
guilty  of  laches.  It  never  can  be  required  of  him,  instantly  on  receipt 
of  it,  under  all  disadvantages,  to  put  it  into  circulation.  To  hold  the 
purchaser  bound  by  such  an  obligation,  would  impede,  if  not  altogether 
destroy,  the  market  for  buying  and  selling /orej^n  bills,  to  the  great 
6* 


66  BYLES    ON    BILLS    OF    EXCHANGE. 

injury,  no  less  than  to  the  inconvenience,  of  the  drawer  himself."  Two 
bills,  one  for  £400  and  the  other  for  £500,  were  drawn  from  Lisbon,  on 
May  12th,  at  thirty  days  after  sight,  endorsed  toG.  at  Paris,  and  by  G.  to 
R.  at  Genoa,  and  by  R.  endorsed  over.  They  were  not  presented  for 
acceptance  till  22d  of  August.  The  jury  found,  and  the  Court  con- 
curred, that  the  bills  were,  under  the  circumstances,  presented  within  a 
reasonable  time. 

Illness,  or  other  reasonable  cause,  not  attributable  to  the  misconduct 
of  the  holder,  will  excuse.  But  the  holder  must  present,  though  the 
drawer  have  desired  the  drawee  not  to  accept. 

The  presentment  must  be  made  either  to  the  drawee  himself,  or  to 
his  authorized  agent.  The  holder's  servant  called  at  the  drawee's  resi 
dence,  and  showed  the  bill  to  some  person  in  the  drawee's  tan-yard, 
who  refused  to  accept  it ;  but  the  witness  did  not  know  the  drawee's 
person,  nor  could  he  swear  that  the  person  to  whom  he  offered  the  bill 
was  he,  or  represented  himself  to  be  so.  Lord  Ellenborough  :  "  The 
evidence  here  offered  proves  no  demand  on  the  drawee,  and  is,  there- 
fore, insufficient." 

When  the  bill  is  presented,  it  is  reasonable  that  the  drawee  should  be 
allowed  some  time  to  deliberate  whether  he  will  accept  or  no.  It  seems 
that  he  may  demand  twenty-four  hours  for  this  purpose,  (and  that  the 
holder  will  be  justified  in  leaving  the  bill  with  him  for  that  period  ;)  at 
least,  if  the  post  do  not  go  out  in  the  interim,  or  unless,  in  the  interim, 
he  either  accepts,  or  declares  his  resolution  not  to  accept.  If  more  than 
twenty-four  hours  be  given,  the  holder  ought  to  inform  the  antecedent 
parties  of  it. 

If  the  owner  of  a  bill,  who  leaves  it  for  acceptance,  by  his  negligence 
enables  a  stranger  to  give  .such  a  description  of  it  as  to  obtain  it  from  the 
drawee,  without  negligence  on  his  part,  the  owner  cannot  maintain 
trover  for  it  against  the  drawee. 

In  case  the  bill  is  directed  to  the  drawee  at  a  particular  place,  it  is  to 
be  considered  as  dishonored  if  the  drawee  has  absconded.  But,  if  he 
have  merely  changed  his  residence,  or  if  the  bill  is  not  directed  to  him 
at  any  particular  place,  it  is  incumbent  on  the  holder  to  use  due  diligence 
to  find  him  out.  And  due  diligence  is  a  question  of  fact  for  the  jury. 
If  the  drawee  be  dead,  the  holder  should  inquire  after  his  personal 
representative,  and,  provided  he  ''ves  within  a  reasonable  distance,  pre 
sent  the  bill  to  him. 

In  an  action  against  the  drawer  on  non-acceptance,  it  is  not  sufficient 
to  allege  mere  non  acceptance ;  presentment  for  acceptance  must  b< 
alleged. 


lii.  — OF  PRESENTMENT   FOR  PAYMENT 

How  made.  —  In  case  of  Bank'uptcy  or  Insolvency.  —  Unnecessary  to  chargt 
a  Guarantee.  —  In  case  of  Drawee'' s  death. —  Of  Holder's  death.  — When 
to  be  made.  —  Time,  hotv  computed.  —  Months.  —  Days.  —  Bills  and 
Notes  at  Sight. —  Usance. —  Old  and  New  Style. — Days  of  Grace. — 
What  in  different  Countries.  —  Ho7v  reckoned.  —  Sundays  and  Holidays, 
hoiv  reckoned.  —  On  what  Instruments  Days  of  Grace  allowed.  —  When 
rresentment  of  Bills  payable  on  Demand  is  to  be  made.  —  Of  a  common 
Bill  of  Exchange  payable  on  Demand.  —  Of  a  Check.  —  Of  a  common 
Frumissnry  Note  payable  on  Demand.  —  Of  a  Bank  Note.  —  Of  othet 
Bankers^  Paper.  —  When  no  time  of  Payment  is  specified.  —  At  what 
ITour.  —  Where,  rvhen  a  Bill  is  made  payable  at  a  particular  place.  — 
Pleading.  —  When  a  Note  is  made  so  payable.  —  Consequence  of  not  duly 
Presenting.  —  Presentment  not  necessary  to  charge  Acceptor.  —  When 
Neglect  to  Present  excused.  —  Of  Bill  seized  uiider  extent.  —  By  circu- 
lating. —  By  the  Absconding  of  the  Drawee.  —  By  Absence  of  Effects  in 
the  Dra?vee's  hands.  —  Not  bij  declaration  of  Acceptor  that  he  will  not 
pay.  —  Advantage  from  Neglect,  horv  waived.  —  Pleading.  —  Evidence 
of  Presentment. 

A  PERSONAL  demand  on  the  drawee  or  acceptor  is  not  necessary.  It  is 
sufficient  if  payment  be  demanded,  at  his  usual  residence  or  place  of 
business,  of  his  wife  or  other  agent ;  for  it  is  the  duty  of  an  acceptor,  if 
he  is  not  himself  present,  to  leave  provision  for  the  payment.  And  it  is 
sufficient  if  payment  be  demanded  of  an  agent  who  has  been  authorized 
to  pay,  or  has  usually  paid,  bills  for  the  drawee.  Thus,  where  a  country 
bank  note  was  made  payable  both  at  Tunbridge  and  in  London,  present- 
ment in  London  was  held  sufficient,  though  it  was  proved,  that,  had  it 
been  presented  at  Tunbridge,  the  nearest  place,  it  would  have  been  paid. 

The  bankruptcy  or  insolvency  of  the  drawee  is  no  excuse  for  a 
neglect  to  present  for  payment ;  for  many  means  may  remain  of  obtain- 
ing payment,  by  the  assistance  of  friends  or  otherwise.  It  has  been  held 
in  the  King's  Bench,  that  the  shutting  up  of  a  bank,  when  any  demand 
there  made  would  have  been  inaudible,  is  substantially  a  refusal  by  the 
bankers  to  pay  their  notes,  to  all  the  world.  But  it  was  decided  in  the 
same  case,  on  error  in  the  Exchequer  Chamber,  that  an  allegation  in 
the  declaration,  that    the  makers   became  insolvent,  and  ceased,  and 


68  BYLES    ON    BILLS    OP    EXCHANGE. 

wholly  declined,  and  refused,  then  and  thenceforth,  to  paj  at  the  plnce 
specified,  any  of  their  notes,  is  insufficient,  not  being  an  allegation  ol 
presentment.  But  it  is  conceived,  notwithstanding  the  observations  of 
the  Court  in  the  last  case,  that  it  cannot  be  necessary  for  the  holders  of 
the  notes  of  a  bank  which  had  notoriously  stopped  payment,  to  go  through 
the  empty  form  of  carrying  notes  up  to  the  bank  doorsj  and  tben  carry- 
ing them  home  again. 

A  presentment  for  payment  is  now  decided  not  to  be  necessary  in 
order  to  charge  a  man  who  guarantees  the  due  payment  of  a  bill  or 
note.  And  it  had  before  been  held  that  where  a  party  was  guarantee 
for  the  vendee  of  goods,  who  had  accepted  a  bill  for  the  amount,  and 
then  became  bankrupt,  the  notorious  insolvency  of  the  vendee  was  suf- 
ficient so  far  to  excuse  the  drawer  as  to  enable  him  to  charge  the  guar- 
antee, unless  it  could  have  been  shown  that  the  bill  would  have  been 
paid,  if  duly  presented,  though  it  would  have  been  otherwise  in  an  action 
of  the  bill. 

If  the  drawee  has  shut  up  his  house,  the  holder  must  inquire  after 
him,  and  attempt  to  find  him  out. 

If  the  drawee  be  dead,  presentment  must  be  made  to  his  personal 
representative  ;  and,  if  he  have  none,  then  at  his  house. 

If  the  holder  die,  presentment  should  be  made  by  his  personal  repre- 
sentatives. 

In  treating  of  the  time  when  presentment  is  to  be  made,  it  will  be 
necessary  to  consider,  first,  how,  on  the  various  sorts  of  bills,  time  is 
computed,  and  then  on  what  bills,  and  to  what  extent,  days  of  grace  are 
allowed. 

In  acts  of  Parliament,  in  deeds,  and  in  legal  proceedings,  the  word 
month  is  taken  to  mean  a  lunar,  and  not  a  calendar,  month  ;  unless  there 
be  something  in  the  context  to  indicate  the  latter  sense  :  but  in  matters 
ecclesiastical,  and  by  the  custom  of  trade,  in  bills  and  notes,  a  month  is 
deemed  to  be  a  calendar  or  solar  month.  The  inequality  in  the  length 
of  the  respective  months  may  sometimes  occasion  a  difficulty  ;  but  it  is 
said  to  be  a  rule  not  to  extend  the  time  at  which  the  bill  falls  due  beyond 
the  month  in  which  it  would  have  fallen  due,  had  that  month  been  of 
the  length  of  thirty-one  days.  Thus,  if  a  bill  at  one  month  be  drawn 
on  the  31st  of  January,  it  will  be  due  on  the  28th  of  February,  and,  with 
the  days  of  grace,  payable  on  the  3d  of  March. 

When  a  bill  is  drawn  at  a  certain  number  of  days  after  date,  or 
after  sight,  those  days  are  reckoned  exclusively  of  the  day  on  which 
the  bill  is  drawn  or  accepted,  and  exclusively  of  the  day  on  which  it 
falls  due. 

We  have  already  observed,  that  on  a  bill  the  words  "  after  sight"  are 
equivalent  to  "  after  acceptance ;"  for  sight  must  appear  in  a  legal  way 


OF  PRESENTMENT  FOR  PAYMENT.  69 

If  a  note  be  made  payable  at  sight,  it  must  be  presented,  before  action 
brought  against  the  maker. 

Usance  is  the  period  which  in  early  times  it  was  usual  to  appoint 
between  different  countries  for  the  payment  of  bills.  —  When  usance  is 
a  month,  half  usance  is  always  fifteen  days,  notwithstanding  the  unequal 
length  of  the  months.  An  usance  between  London,  Aleppo,  Altona,  and 
Amsterdam,  Antwerp,  Brabant,  Bruges,  Flanders,  Geneva,  Germany, 
Hamburg,  Holland  and  the  Netherlands,  Lisle,  Middleburg,  Paris  oi 
Amsterdam,  Rotterdam  and  Rouen,  is  one  calendar  month ;  between 
London  and  the  Spanish  or  Portuguese  towns,  two  calendar  months  ; 
between  London  and  Genoa,  Venice,  or  places  in  Italy,  it  is  three  calen- 
dar months. 

It  is  said  that  all  the  countries  with  which  the  English  are  in  the 
habit  of  negotiating  bills  computed  their  time  by  the  new  style,  with 
the  single  exception  of  Russia.  In  the  case  of  bills  drawn  in  a  place 
using  one  style,  and  payable  in  a  place  using  another,  if  drawn  payable 
at  a  certain  period  after  date,  they  fall  due  as  they  would  have  done  in 
the  country  in  which  they  were  drawn.  Thus,  a  bill  drawn  Feb.  1,  in 
London,  on  St.  Petersburg,  at  one  month,  would  be  payable  without 
the  days  of  grace,  on  March  1,  in  our  calendar  ;  and,  as  it  was  drawn 
on  Jan.  21,  old  style,  it  would  fall  due  on  Feb.  21,  in  the  Russian  cal- 
endar. But,  if  the  bill  were  drawn  payable  at  a  day  certain,  or  at  a  cer- 
tain period  after  sight,  the  time  must  then  be  reckoned  according  to  the 
etyle  of  the  place  on  which  it  is  drawn. 

Days  of  grace  are  so  called,  because  they  were  formerly  allowed  the 
drawee  as  a  favor  ;  but  the  laws  of  commercial  countries  have  long 
since  recognized  them  as  a  right.  The  number  of  these  days  varies  in 
different  places.  Mr.  Kyd  gives  the  following  table,  which,  however, 
has  been  altered  in  many  places  since  his  day,  by  the  substitution  of  the 
French  code,  and  other  circumstances  :  — 

"Great  Britain,  Ireland,  Bergamo  and  Vienna,  three  days. 

"  Frankfort,  out  of  the  fair-time,  four  days. 

"  Leipsic,  Naumberg  and  Augsburg,  five  days. 

"  Venice,  Amsterdam,  Rotterdam,  Middleburg,  Antwerp,  Cologne, 
Breslau,  Naremburg  and  Portugal,  six  days. 

"Dantzic,  Koningsberg  and  France,  ten  days. 

"  Hamburg  and  Stockholm,  twelve  days. 

"  Naples,  eight ;  Spain,  fourteen  ;  Rome,  fifteen  j  and  Genoa,  thirtv 
days. 

"  Leghorn,  Milan  and  some  other  places  in  Italy,  no  fixed  number. 

"  Sundays  and  holidays  are  mcluded  in  the  respite  days,  at  London, 
Naples,  Amsterdam,  Rotterdam,  Antwerp,  Middleburg,  Dantzic,  Kon 
•ngsberg  and  France  ;  but  not  at  Venice,  Cologne,  Breslau  and  Nurem 


70  BYLES    ON    BILLS    OF    EXCHANGE. 

berg.     At  Hamburg,  the  day  on  which  the  bill  falls  due  makes  one  ol 
the  days  of  grace  ;  but  it  is  not  so  elsewhere." 

Three  days  of  grace  are  allowed  in  North  America,  at  Berlin,  and  in 
Scotland. 

At  Rio  de  Janeiro,  Bahia  and  other  parts  of  Brazil,  fifteen  days. 

At  St.  Petersburg,  ten  days  on  bills  after  date  ;  three  days  on  bills  at 
sight,  ten  days  on  bills  received  and  presented  after  they  are  due. 

At  Trieste  and  Vienna,  three  days  on  bills  after  date. 

The  three  days'  grace  allowed  in  this  country  are  reckoned  exclusive 
of  the  day  on  which  the  bill  falls  due,  and  inclusive  of  the  last  day  of 
grace. 

Where  there  are  no  days  of  grace,  and  the  bill  falls  due  on  a  Sunday, 
Christmas-day,  Good  Friday,  public  fast  or  thanksgiving  day,  or  where 
the  last  of  the  days  of  grace  happens  on  such  a  day,  the  bill  becomes 
payable  on  the  day  preceding ;  and,  if  not  then  paid,  must  be  treated  as 
dishonored. 

A  presentment  for  payment  before  the  expiration  of  the  days  of  grace 
is  premature,  and  will  not  enable  the  holder  to  charge  the  antecedent 
parties. 

Days  of  grace  are  allowed  on  promissory  notes,  as  well  as  on  bills. 
They  are  allowed,  whether  the  bill  or  note  be  made  payable  on  a  certain 
event,  or  at  a  certain  day,  or  at  a  certain  number  of  years,  months, 
weeks  or  days,  after  date  or  after  sight,  or  at  usance,  or  by  instalments. 
But  they  are  not  allowed  on  bills  or  notes  payable  on  demand.  "Whether 
days  of  grace  are  allowed  on  bills  payable  at  sight,  seems  yet  undecided. 
The  weight  of  authority  has  been  considered  to  incline  in  favor  of  such 
an  allowance. 

If  days  of  grace  are  to  be  allowed  on  bills  payable  at  sight,  the  time 
when  they  should  be  presented  has  already  been  considered,  in  the 
Chapter  on  Presentment  for  Acceptance.  If  not,  then  they  stand  on  the 
same  footing  as  bills  payable  indefinitely,  and  bills  payable  on  demand. 

We  have  already  seen  that  the  time  which  bills  payable  after  sight 
have  to  run  is  computed  from  the  date  of  the  acceptance  ;  a  note  payable 
at  a  certain  period  after  sight  is  payable  at  that  period  after  presentment 
for  sight.  So,  if,  some  time  after  a  refusal  to  accept,  a  bill,  payable 
after  sight,  be  accepted,  sjt pro  protest,  the  time  is  calculated,  not  from  the 
date  of  the  exhibition  of  the  bill  to  the  drawee,  but  from  the  date  of  the 
acceptance,  supra  protest. 

Bills  and  notes  payable  on  demand,  and  checks,  must  be  presented 
within  a  reasonable  time.  What  is  a  reasonable  time  seems  to  be  a 
law.  And  such  a  decision  is  conformable  with  the  principles  of  law. 
"Reasonable  time,"  says  Lord  Coke,  "shall  be  adjudged  by  the  discre- 
tion of  the  Justices  before  whom  the  cause  dependeth  ;  and  so  it  is  of 
reasonable  fines,  customs  and  services,  upon  the  true  state  of  the  cast 


OF    PRESENTMKNT    FOR    PAYMENT.  71 

depending  before  them  ;  fur  reasonableness  in  these  cases  belongeth  tc 
tlie  knowledge  of  the  law,  and,  therefore,  to  be  decided  by  the  justices 
Quam  limgum  esse  debet  non  definiiur  in  jure,  sed  pendet  ex  discrelione 
justiaariorum.  And,  this,  being  said  of  time,  the  like  may  be  said  ot 
things  incertaine,  which  ought  to  be  reasonable  ;  for  nothing  that  is  con- 
trary to  reason  is  consonant  to  law."  Besides,  the  opinions  of  jurors 
have  been  so  various  that  there  can  be  no  certainty  on  the  subject, 
unless  it  be  held  to  be  a  question  of  law.  Yet  we  have  seen  that  whaj 
is  a  reasonable  time  within  which  to  present  for  acceptance  a  bill  drawr. 
payable  after  sight  has  been  held  a  question  of  fact  to  the  jury,  and  the 
same  point  has  been  ruled  as  to  the  time  uf  presentment  for  payment  of 
a  note  payable  on  demand. 

A  man  taking  a  bill  or  note  payable  on  demand,  or  a  check,  is  not 
bound,  laying  aside  all  other  business,  to  present  or  transmit  it  for 
pavment  the  very  first  opportunity.  It  has  long  since  been  decided,  in 
numerous  cases,  that,  though  the  party  by  whom  the  bill  or  note  is  to  be 
paid  live  in  the  same  place,  it  is  not  necessary  to  present  the  instrument 
fur  payment  till  the  morning  next  after  the  day  on  which  it  was  received. 
And  later  cases  have  established,  that  the  holder  of  a  check  has  th^ 
whole  of  the  banking  hours  of  the  next  day  within  which  to  present  i'; 
for  payment. 

Negotiable  instruments  payable  on  demand  may  be  distributed  into 
several  classes,  and  the  time  within  which  they  ought  to  be  presented 
for  paj'ment,  and  the  consequences  of  a  failure  to  make  due  present- 
ment are  not  precisely  the  same  in  every  class. 

Negotiable  instruments  payable  on  demand  are  common  commercial 
hills  of  exchange,  checks,  common  promissory  notes,  bank  notes,  and 
bankers'  cash  notes  and  bankers'  bills. 

It  is  conceived  that  a  common  bill  of  exchange  payable  on  demand 
ought,  if  the  parties  live  in  the  same  place,  to  be  presented  the  next 
day  after  the  payee  has  received  it.  If  the  bill  must  be  sent  by  post  to 
be  presented,  it  ought  to  be  posted  on  the  day  next  after  the  day  on 
which  it  was  received,  and  that  the  person  who  receives  it  by  post,  thai 
he  may  present  it,  should  do  so  on  the  day  next  following  the  day  on 
which  he  receives  it. 

Such,  also,  are  the  general  rules  regulating  the  presentment  of  bank- 
ers' checks,  which  are  really  bills  of  exchange  ;  but  as  checks  on  bank- 
ers are  now  extremely  common,  it  has  been  thought  convenient  to  dis- 
cuss the  presentment  of  checks  more  in  detail  in  the  chapter  relating  to 
checks. 

A  common  promissory  note  payable  on  demand  differs  from  a  bill 
payable  on  demand,  or  a  check,  in  this  respect ;  the  bill  and  check  are 
evidently  intended  to  be  presented  and  paid  immediately,  and  the  drawer 
\iay  have  good  reasons  for  desiring  to  withdraw  his  funds  from  'he 


72  BYLES    ON    BILLS    OF    EXCHANGE. 

control  of  the  drawee  without  delay  ;  but  a  common  promissory  note 
payable  on  demand  is  very  often  originally  intended  as  a  continuing 
security,  and  afterwards  endorsed  as  such.  Indeed,  it  is  not  uncommon 
for  the  payee,  and  afterwards  the  endorsee,  to  receive  from  the  maker 
interest  periodically  for  many  years  on  such  a  note.  And  sometimes 
the  note  is  expressly  made  payable  with  interest,  which  clearly  indicates 
the  intention  of  the  parties  to  be,  that  though  the  holder  may  demand 
payment  immediately,  yet  he  is  not  bound  to  do  so.  It  is,  therefore, 
conceived  that  a  common  promissory  note,  payable  on  demand,  espec- 
ially if  made  payable  with  interest,  is  not  necessarily  to  be  presented 
the  next  day  after  it  has  been  received,  in  order  to  charge  the  endorser ; 
and  that,  when  the  endorser  defends  himself  on  the  ground  of  delay  in 
presenting  the  note,  it  will  be  a  question  for  a  jury,  whether,  under  all  the 
circumstances,  the  delay  of  presentment  was  or  was  not  unreasonable. 

Bank  notes  and  bankers'  cash  notes  differ  again  from  other  promis- 
sory notes  in  this,  that  they  are  intended  to  pass  from  hand  to  hand, 
and  are  issued  that  they  may  circulate  as  money,  returning  to  the  bank 
as  seldom  as  possible  ;  but  they  are  not  intended  as  a  continuing 
security  in  the  hands  of  any  one  holder.  Therefore,  a  man  who  takes 
bank  notes,  or  bankers'  cash  notes  in  payment  must  present  them  or 
forward  them  for  presentment  the  day  after  he  receives  them,  in  order 
to  enable  him,  in  the  event  of  the  bank  failing,  to  sue  the  person  from 
•whom  they  were  received  on  the  consideration  that  was  given  for  them. 
But,  as  it  would  be  inconsistent  with  the  very  nature  and  design  of  such 
notes,  that  every  man  who  takes  them  should  present  them  for  pay- 
ment, it  is  sufficient  to  exonerate  the  taker  from  the  charge  of  laches, 
if  he  circulated  them  within  the  time  within  which  he  ought  otherwise 
to  have  presented  them. 


IV.  — OF  PAYiMENT. 

To  whom  it  should  be  made.  —  Of  Crossed  Checks.  —  To  a  wrongful  Holder 

—  Effect  of  Payment  by  Acceptor  —  by  Drawer  —  by  a  Stranger.  — 
When  to  be  made.  —  At  what  Time  of  Day.  —  Subsequent  Tender.  —  Pre- 
mature  Payment.  —  After  Action  brought.  —  Payment  by  Notes  or  Checks. 

—  What  amounts  to  Payment.  —  Legacy.  —  Appropriation  of  Payments. 

—  Part  Payment.  —  When  Payment  n-ill  be  presumed.  —  Evidence  of 
Payment.  —  Of  delivering  vp  the  Bill.  —  Of  giving  a  Receipt.  —  Effect 
of  Receipt. — Tender  of  Part  Payment.  —  Plea  of  Payment.  —  Retracta- 
tion of  Payment. 

Payment  should  be  made  to  the  holder  and  the  real  proprietor  of  the 
bill ;  for  payment  to  any  other  party  is  no  discharge  to  the  acceptor  , 
unless,  indeed,  the  money  paid  finds  its  way  into  the  holder's  hands,  and 
the  holder  has  treated  it  as  received  in  liquidation  of  the  bill.  A 
drew  a  bill  upon  defendant,  which  defendant  accepted.  A  then  endorsed 
it  to  the  plaintiffs,  his  bankers,  who  entered  to  the  credit  of  plaintiffs' 
account,  and,  at  maturity,  presented  it  to  the  defendant  for  acceptance 
and  it  was  dishonored.  The  plaintiffs  then  debited  A  with  the  amount, 
but  did  not  return  him  the  bill.  A  few  days  afterwards,  defendant  paid 
the  amount  to  A.  A  still  continued  his  banking  account  with  the  plain- 
tiffs, and  at  different  times  paid  in  more  money  than  was  sufficient  to 
cover  the  amount  of  the  bill,  and  all  the  preceding  items  M'hich  stood 
above  it  in  the  account,  though  there  was  always  a  balance  against 
him  larger  than  the  amount  of  the  bill.  A  failed,  and  the  plaintiffs 
proved  for  the  whole  of  their  balance  under  his  commission.  They 
brought  this  action  on  the  bill  against  the  defendant,  the  acceptor.  Best, 
C.  J. :  "  The  payment  to  A  would  not  of  itself  have  discharged  the 
defendant,  the  plaintiffs  having  been  at  that  time  the  holders,  and 
entitled  to  the  amount  of  the  bill ;  but  the  ground  on  which  the  defend- 
ant is  discharged  is,  that  the  plaintiffs  not  only  entered  the  bill  to  the 
credit  of  A,  but  treated  it  as  having  been  paid." 

It  is  a  common  practice,  in  the  city  of  London,  to  write  across  the  face 
of  a  check  the  name  of  a  banker.  The  effect  of  this  crossing  is  to  direct 
the  drawees  to  pay  the  check  only  to  the  banker  whose  name  is  written 
across,  and  the  object  of  the  precaution  is  to  invalidate  the  payment  to 
a  wrongful  owner  in  case  of  loss.   It  seems,  however,  that  the  holder  may 


74  BYLES    ON    BILLS    OF    EXCHANGE. 

erase  the  name  of  the  banker  and  substitute  that  of  another  banker.  It 
is  also  not  unusnal  to  write  the  words  and  Co.,  only  in  the  first  instance, 
leaving  the  pnrticular  banker's  name  to  be  filled  up  afterwards,  so  as  to 
insure  the  presentment  by  some  banker  or  other.  C  drew  a  check  on  hig 
banker  payable  to  A  and  B,  assignees  of  C  or  bearer,  and  wrote  the  name 
of  their  banker  across  it.  B,  who  had  another  private  account  with  the 
banker,  paid  the  check  into  that  account ;  it  was  held  that  the  bankers 
were  justified  in  applying  it  to  that  account,  the  drawer's  writing  the 
name  of  the  bankers  of  the  payee  of  the  check  across  it  not  being, 
according  to  the  custom  of  trade,  information  to  the  bankers  that  the 
money  wa;  the  money  of  the  payees. 

There  are  'ome  cases  in  which  payment  to  a  wrongful  holder  is  pro- 
tected, and  others  in  which  it  is  not.  If  a  bill  or  note,  payable  to 
bearer,  either  originally  made  so,  or  become  so  by  an  endorsement  in 
blank,  be  lost  or  stolen,  we  have  seen  that  a  bona  fide  holder  may  com 
pel  payment.  Not  only  is  the  payment  to  a  bona  fide  holder  protected, 
but  payment  to  the  thief  or  finder  himself  will  discharge  the  maker  or 
acceptor,  provided  such  payment  were  not  made  with  knowledge  or  sus- 
picion of  the  infirmity  of  the  holder's  title,  or  under  circumstances  which 
might  reasonably  awaken  the  suspicions  of  a  prudent  man.  "  For  it  is 
a  general  rule,  that  where  one  of  two  innocent  persons  must  suffer  from 
the  acts  of  a  third,  he  who  has  enabled  such  third  person  to  occasion  the 
loss,  must  sustain  it."  And  supposing  the  equity  of  the  loser  and  payer 
precisely  equal,  there  is  no  reason  why  the  law  should  interpose  to  shift 
the  injury  from  one  innocent  man  upon  another.  But,  if  such  a  pay- 
ment be  mode  under  suspicious  circumstances,  or  without  reasonable 
caution,  or  out  of  the  usual  course  of  business,  it  will  not  discharge  the 
payer.  If  payment  be  made  before  the  bill  or  note  is  due,  or  long  after 
it  is  due,  or,  in  case  of  a  check,  long  after  it  is  drawn,  that  is  a  payment 
out  of  the  usual  course  of  business. 

And,  therefore,  though  a  check  be  really  drawn  by  a  banker's  cus- 
tomer, but  torn  in  pieces  before  circulation  by  the  drawer,  with  inten- 
tion of  destroying  it,  and  a  stranger,  picking  up  the  pieces,  pastes  them 
together,  and  presents  the  check  soiled  and  so  joined  together  to  the 
banker,  and  he  pays  it,  the  banker  cannot  charge  his  customer  with  this 
payment,  for  the  instrument  was  cancelled,  and  carried  with  it  reason- 
able notice  that  it  had  been  cancelled. 

If  the  bill  or  note  be  not  payable  to  bearer,  but  transferable  by 
endorsement  only,  and  be  paid  to  a  wrong  party,  the  payer  is  not  dis- 
charged. 

A  bill  is  not  discharged,  and  finally  extinguished,  until  paid  by  or 
on  behalf  of  the  acceptor  ;  nor  a  note  until  paid  by  or  on  behalf  of  the 
maker. 

It  does  not  appear  to  be  settled,  whether  part  payment  by  the  drawei 


OF    PAYMENT. 


75 


to  the  holder  will  discharge  the  acceptor  pro  tanto,  or  whether  the  holder 
may,  nevertheless,  recover  the  whole  amount  from  the  acceptor,  and 
hold  an  equivalent  to  the  amount  received  from  the  drawer,  as  money 
received  of  the  acceptor  to  the  drawer's  use.  It  is  conceived  that  the 
holder  can  only  recover  of  the  acceptor  the  amount  of  the  bill  minus  the 
sum  paid  by  the  drawer.  The  acceptor  is  the  principal,  and  the  drawer 
is  the  surety ;  it  should  seem,  therefore,  that  a  payment  by  the  drawer 
discharges  the  acceptor's  liability  to  the  holder  pro  tanto,  and  makes  the 
acceptor  liable  to  the  drawer  for  money  paid  to  his  use.  Besides,  had 
the  drawer  paid  the  whole  bill,  nominal  damages  only  could  have  been 
recovered  by  the  holder  of  the  acceptor.  But  payment  by  the  drawer  of 
an  accommodalion  bill  is  a  complete  discharge  of  the  bill. 

Payment  by  a  stranger  of  the  amount  of  the  bill  to  the  bankers,  at 
whose  house  the  bill  is  made  payable  by  the  acceptor,  the  party  paying 
obtaining  possession  of  the  bill,  is  not  a  payment  by  the  acceptor. 

The  acceptor  of  a  bill,  whether  inland  or  foreign,  or  the  maker  of  a 
note,  should  pay  it  on  a  demand  made,  at  any  time  within  the  business 
hours,  on  the  day  it  falls  due.  And,  if  it  be  not  paid  on  such  demand, 
the  holder  may  instantly  treat  it  as  dishonored. 

But  the  acceptor  has  the  whole  of  that  day  within  which  to  make  pay- 
ment ;  and  though  he  should,  in  the  course  of  that  day,  refuse  payment, 
•which  refusal  entitles  the  holder  to  give  notice  of  dishonor,  yet,  if  he 
subsequently,  on  the  same  day,  makes  payment,  the  payment  is  good, 
and  the  notice  of  dishonor  becomes  of  no  avail. 

A  plea  of  tender,  by  the  acceptor,  after  the  day  of  payment,  is  insuffi- 
cient. 

If  a  bill  or  note  be  paid  before  it  is  due,  and  is  afterwards  endorsed 
over,  it  is  a  valid  security  in  the  hands  of  a  bona  fide  endorsee.  "  I 
agree,"  says  Lord  Ellenborough,  "that  a  bill  paid  at  maturity  cannot 
be  reissued,  and  that  no  action  can  be  afterwards  maintained  upon  it, 
by  a  subsequent  endorsee.  A  payment  before  it  becomes  due,  however, 
I  think,  does  not  extinguish  it,  any  more  than  if  it  were  merely  dis- 
counted. A  contrary  doctrine  would  add  a  new  clog  to  the  circulation 
of  bills  and  notes  ;  for  it  would  be  impossible  to  know  whether  there  had 
not  been  an  anticipated  payment  of  them." 

If  the  holder  constitutes  any  one  of  the  parties  liable  to  him  his  exec- 
utor, and  die,  the  appointment  is  equivalent  to  payment  and  a  release.  A 
premature  release  will  not,  any  more  than  a  premature  payment,  pro- 
tect  the  releasee  from  liability  to  a  subsequent  holder,  without  notice. 

But  the  payment  on  a  note  payable  on  demand  will  be  a  defence,  even 
against  an  endorsee,  for  value  without  notice;  for  the  statute,  which 
imperatively  prohibits  the  reissuing  of  such  a  note,  dispenses  with 
notice. 


76  BYLES    ON    BILLS   OF    EXCHANGE. 

A  jaymeut  after  an  action  brought  will  not  prevent  the  holder  from 
proceeding  for  his  costs. 

If  the  bill  be  paid,  the  payer  has  a  right  to  insist  on  its  being  deliv 
ered  up  to  him  ;  but,  if  it  be  not  paid,  the  holder  should  keep  it.  Yet 
it  has  been  held  that  an  agent  is  justified,  by  the  usage  of  trade,  in 
delivering  it  up  on  receiving  a  check,  though  that  check  is  afterwards 
dishonored.  But  the  drawers  or  endorsers,  in  such  a  case,  would  be  dis- 
charged, for  they  have  a  right  to  insist  on  the  production  of  the  bill,  and 
to  have  it  delivered  up  on  payment  by  them. 

If  the  holder  of  a  check  receive  bank  notes  instead  of  cash,  and  the 
banker  fail,  the  drawer  is  discharged. 

A  set-off  does  not  amount  to  payment,  unless  it  be  mutually  agreed 
that  one  demand  shall  be  set  off  against  the  other.  But  an  agreement, 
even  by  one  of  several  partners,  that  a  separate  debt  due  from  the  part- 
ner shall  be  set  off  against  a  joint  debt  due  to  the  firm,  binds  the  firm. 
Credit  given  to  the  holder  of  a  bill  by  the  party  ultimately  liable  is  tanta- 
mount to  payment.  Where  a  banker  takes  from  a  customer  and  his 
surety  a  promissory  note,  intended  to  secure  a  running  balance,  and 
makes  advances  on  the  faith  of  the  note,  it  is  not  discharged  by  subse- 
quent unappropriated  repayments  made  by  the  customer  to  the  banker, 
but  still  continues  as  a  security  ror  the  existing  balance. 

There  are  many  circumstances  under  which  a  legacy  by  a  debtor  to 
his  creditor,  of  equal  or  greater  amount  than  the  debt,  will  be  considered 
a  satisfaction  of  the  debt.  But  a  legacy  to  the  holder  of  a  negotiable  bill 
or  note  can  never  be  considered  as  a  satisfaction  of  the  debt  on  that 
instrument.  For  a  legacy  is  a  satisfaction  when  it  may  be  presumed  to 
have  been  the  intention  of  the  testator  that  it  should  so  operate ;  but 
that  cannot  be  presumed,  when,  from  the  assignable  nature  of  the  debt, 
the  testator  could  not  tell  whether  or  no  the  legatee  was  at  the  time  of 
the  bequest  his  creditor. 

Where  a  man  is  indebted  to  another  in  several  items,  and  makes  a 
partial  payment,  it  often  becomes  a  question,  important  not  only  to  the 
parties  themselves  but  to  third  persons,  to  which  of  the  items  the  pay- 
ment shall  be  imputed.  The  rule  of  the  Roman  law,  and  therefore,  in 
general,  of  continental  law  is,  that  a  payment  shall  be  appropriated,  first, 
according  to  the  intention  of  the  debtor  at  the  time  of  making  it ;  but, 
if  that  be  unknown,  then,  secondly,  at  the  election  of  the  creditor,  signi- 
fied to  the  debtor  at  the  time  of  receiving  it.  If  the  intention  of  neither 
be  known,  payment  must  then  be  appropriated  according  to  the  presumed 
intention  of  the  debtor,  and  it  will  be  presumed  that  he  meant  to  dis- 
charge such  debts  as  were  most  burdensome  ;  as,  a  debt  carrying  inter- 
est, rather  than  one  which  carries  none  ;  a  debt  secured  by  a  penalty, 
rather  than  one  resting  on  a  simple  stipulation  ;  a  debt  on  which  he  may 
be  made  a  bankrupt,  rather  than  one  which  will  not  subject  him  to  such 


OF    PAYMENT.  // 

a  liability.  If  all  the  debts  are  equal  in  degree,  the  payment  i  d  then 
be  imputed  to  tliem  according  to  their  respective  priority  in  the  .uJer  of 
time.  Such  is  the  rule  of  the  civil  law,  from  which,  in  some  particulars, 
the  common  law  difl'ers.  Wherever  the  transactions  between  the  two 
parlies  form  one  general  account  current,  or  are  treated  by  them  as 
such,  payments  are  to  be  imputed  to  debts  in  the  order  of  time,  and  the 
balance  is  to  be  struck  at  the  foot  of  the  account.  But,  if  an  unappro- 
priated payment  be  made  on  account  of  several  distinct  insulated  debts, 
which  cannot  be  considered  in  the  light  of  a  running  account  between 
the  par>ies,  the  common  law  then  differs  from  the  civil  law,  and  gives  the 
creditor  a  right  of  appropriating  it  at  any  time  before  action,  as  he 
pleases,  provided  a  prior  appropriation  have  not  been  communicated  to 
the  debtor. 

An  appropriation  which  would  have  the  effect  of  paying  one  man's 
debt  with  another  man's  money,  will  not  be  allowed.  Nor  can  there  be 
an  appropriation  which  would  deprive  a  debtor  of  a  benefit,  such  as  the 
taxation  of  costs. 

A  payment  may  be  imputed  to  a  demand  for  which  the  creditor  could 
not  recover  at  law.  But  the  law  will  ascribe  a  payment  to  a  legal  debt, 
rather  than  to  an  illegal  one.  A  party  receiving  money  for  the  use  of 
another  from  a  third  person,  which  is  not  properly  a  payment,  but  a  set- 
off, cannot  appropriate  the  money  without  the  knowledge  or  consent  of 
him  for  whom  it  has  been  received.  It  has  been  held,  that  a  payment 
may  be  appropriated  to  a  disputed  debt,  if  it  be  really  a  good  debt. 

Part  payment  of  the  debt  by  the  party  liable  is  no  discharge  of  the 
party  liable,  but  part  payment  by  a  stranger  may  be.  And  it  has  been 
held,  that  where  a  promissory  note  is  due  and  unpaid,  so  that  not  only 
the  principal,  but  interest,  (at  least  to  a  nominal  amount,)  is  due  also, 
the  principal  may  be  taken  in  satisfaction  of  the  debt  and  damages. 

As  the  lapse  of  twenty  years  is  sufficient  to  raise  a  presumption  that 
a  bond  has  been  paid,  so  it  has  been  held  to  be  a  good  defence  to  aa 
action  on  a  promissory  note  payable  on  demand.  But  if  during  this 
period  the  plaintiff  was  an  alien  enemy,  and  payment  to  him  would  con- 
sequently have  been  illegal,  such  a  presumption  would  not,  it  seems, 
arise. 

The  production  of  a  check  drawn  by  the  defendant  on  his  banker,  and 
endorsed  by  the  plaintiff,  is  evidence  of  payment ;  but  not  if  there  have 
been  several  transactions  between  the  parties  without  evidence  to  con- 
nect the  delivery  of  the  check  with  the  payment  in  question.  The  mere 
production  of  a  bill  from  the  custody  of  the  acceptor  is  not  prima  facie 
evidence  of  his  having  paid  it,  without  proof  of  its  having  been  once 
in  circulation  after  it  had  been  accepted. 

The  party  paying  a  bill  or  note  has  a  right  to  insist  on  its  being  dcliv- 
7* 


78  BYLES    ON    BILLS    OF    EXCHANGE. 

ered  up  to  him.    But  where  the  bill  or  note  is  not  negotiable,  he  can 
not  refuse  to  pay  it  till  if  is  delivered  up. 

It  was  formerly  held  that  a  party  paying  a  debt  could  not  in  general 
demand  a  receipt  for  the  money,  and  therefore  that  a  tender  on  condition 
of  having  a  receipt  was  insufficient.  It  is  usual  to  write  a  receipt  on 
the  back  of  bills,  and  it  has  been  said  that  it  is  the  duty  of  bankers  to 
make  some  memorandum  on  bills  or  notes  which  have  been  paid.  And 
a  receipt  on  a  distinct  piece  of  unstamped  paper,  though  it  cannot  be 
looked  at  as  evidence  of  the  payment,  may  be  shown  to  a  witness  who 
has  signed  it,  to  refresh  his  memory,  and  enable  him  to  speak  to  the  fact 
of  payment. 

A  receipt  on  the  back  of  a  bill  imports  prima  facie  that  it  has  been 
paid  by  the  acceptor. 

A  tender  of  part  of  the  amount  of  an  entire  sum  due  on  a  bill  or  note, 
seems  not  to  be  good  even  pro  tanto. 

A  defendant,  where  there  is  a  plea  of  payment,  is  entitled  to  reduce 
vhe  damages  by  the  amount  of  payment  established,  though  he  be  unable 
to  prove  the  plea.  But  if  he  plead  that  a  note  was  given  for  a  part 
only  of  the  apparent  consideration,  and  allege  payment  of  that  part,  and 
on  issue  joined  the  plea  is  found  against  him,  the  plaintiff  is  entitled  to 
a  verdict  for  the  full  amount  of  the  note. 

If  the  drawee  discover,  after  payment,  that  the  bill  or  check  is  a  for- 
gery, he  may,  in  general,  by  giving  notice  on  the  same  day,  recover 
back  the  money.  And  if  he  have  paid  the  bill  with  the  understanding 
that  he  was  to  receive  it  back,  and  do  not,  he  may  bring  an  actioa  to 
retract  the  payment 


OF  PROTESTING  AND  NOTING. 

Protest  necessary  on  Foreign  Bills,  and  why.  —  By  whom  to  he  made.—  Offia 
of  a  Notary.  —  JVlien  to  be  made.  — Where  to  be  made.  —  Form  of  Protest. 

—  For  better  Security.  —  Noting,  what.  —  Notice  of  a  Protest.  —  Copy  of 
Protest.  —  When  Protest  excused.  —  Protest  of  Inland  Bills.  —  Pleading. 

—  Evidence. 

When  a  foreign  bill  is  refused  acceptance  or  payment,  it  was  and 
still  is  necessary,  by  the  custom  of  merchants,  in  order  to  charge  the 
drawer,  that  the  dishonor  should  be  attested  by  a  protest.  For,  by  the 
law  of  most  foreign  nations,  a  protest  is,  or  was,  essential,  m  case  of 
dishonor  of  any  bill ;  and,  though  by  the  law  of  England  it  is  uimeces- 
sary  in  the  case  of  an  inland  bill,  yet,  for  the  sake  of  uniformity  in  in- 
ternational transactions,  a  foreign  bill  must  be  protested.  Besides,  a 
protest  affords  satisfactory  evidence  of  dishonor  to  the  drawer,  who, 
from  his  residence  abroad,  might  experience  a  difficulty  in  making  proper 
inquiries  on  the  subject,  and  be  compelled  to  rely  on  the  representation 
of  the  holder.  It  also  furnishes  an  endorsee  with  the  best  evidence  to 
charge  an  antecedent  party  abroad  ;  for  foreign  courts  give  credit  to  the 
acts  of  a  public  functionary,  in  the  same  manner  as  a  protest  under  the 
seal  of  a  foreign  notary  is  evidence,  in  our  courts,  of  the  dishonor  of  a 
bill  payable  abroad. 

The  protest  should  be  made  by  a  notary  public ;  but,  if  there  be  no 
such  notary  in  or  near  the  place  where  the  bill  is  payable,  it  may  be 
made  by  an  inhabitant,  in  the  presence  of  two  witnesses. 

A  notary,  registrarius,  actuarius,  scriniarius,  was  anciently  a  scribe 
that  only  took  notes  or  minutes,  and  made  short  drafts  of  writings  and 
other  instruments,  both  public  and  private.  He  is  at  this  day,  in  Eng- 
land, a  public  officer  of  the  civil  and  canon  law,  appointed  by  the  Arch- 
bishop of  Canterbury,  who,  in  the  instrument  of  appointment,  decrees 
"  that  full  faith  be  given,  as  well  in  as  out  of  judgment,  to  the  instru- 
ments by  him  to  be  made." 

The  protest  of  a  foreign  bill  should  be  begun,  at  least,  (and  such  an 
incipient  protest  is  called  noting,)  on  the  day  on  which  acceptance 
or  payment  is  refused  j  but  it  may  be  drawn  up  and  completed  at  any 
time  before  the  commencement  of  the  suit,  or  even  \  "ine  the  trial,  and 


80  BYLES    ON    BILLS    OF    EXCHANGE. 

ante-dated  accordingly.     An  inland  bill  cannot  be  protested  for  non- 
payment till  the  day  after  it  is  due. 

A  protest  is,  in  form,  a  solemn  declaration,  written  by  the  notary, 
under  a  fair  copy  of  the  bill,  stating  that  the  payment  or  acceptance  has 
been  demanded  and  refused,  the  reason,  if  any,  assigned,  and  that  the 
bill  is  therefore  protested.  When  the  protest  is  made  for  a  qualified 
acceptance,  it  must  not  state  a  general  refusal  to  accept,  otherwise  the 
holder  cannot  avail  himself  of  the  qualified  acceptance. 

Besides  the  protest  for  non-acceptance  and  for  non-payment,  the 
holder  may  protest  the  bill  for  better  security.  Protest  for  better  security 
is  where  the  acceptor  becomes  insolvent,  or  where  his  credit  is  publicly 
impeached  before  the  bill  falls  due.  In  this  case,  the  holder  may  cause 
a  notary  to  demand  better  security  ;  and,  on  its  being  refused,  the  bill 
may  be  protested,  and  notice  of  the  protest  may  be  sent  to  an  antecedent 
party.  Yet,  it  seems,  the  holder  must  wait  till  the  bill  falls  due  before 
he  can  sue  any  party.  Nor  does  there  appear  any  advantage  from  the 
protest  more  than  from  simple  notice  of  the  circumstances  ;  except  that, 
after  such  a  protest,  there  may  be  a  second  acceptance  for  honor. 
Whereas,  without  the  intervention  of  a  protest,  there  cannot  be  two 
acceptances  on  the  same  bill. 

Noting  is  a  minute  made  on  the  bill  by  the  officer  at  the  time  of 
refusal  of  acceptance  or  payment.  It  consists  of  his  initials,  the  month, 
the  day,  the  year,  and  his  charges  for  minuting  ;  and  is  considered  as 
the  preparatory  step  to  a  protest.  "  Noting,"  says  Mr.  J.  Buller,  "  is 
unknown  in  the  law,  as  distinguished  from  the  protest  ;  it  is  merely  a 
preliminary  step  to  the  protest,  and  has  grown  into  practice  within  these 
few  years."  A  bill,  however,  is  often  noted,  where  no  protest  is  either 
meant  or  contemplated  ;  as  in  the  case  of  many  inland  bills.  The  use 
of  it  seems  to  be,  that  a  notary,  being  a  person  conversant  in  such  trans- 
actions, is  qualified  to  direct  the  holder  to  pursue  the  proper  conduct  in 
presenting  a  bill,  and  may,  upon  a  trial,  be  a  convenient  witness  of  the 
presentment  and  dishonor.  In  the  mean  time,  the  minute  of  the  notary, 
accompanying  the  returned  bill,  is  satisfactory  assurance  of  non-pay 
ment  or  non-acceptance,  to  the  various  parties  by  whom  the  amount  ot 
the  bill  may  be  successively  paid. 

If  the  drawer  reside  abroad,  a  copy,  or  some  memorial  of  the  protest, 
ought  to  accompany  the  notice  of  dishonor.  But  notice  of  the  protest 
certainly  is  not  necessary,  if  the  drawer  resides  within  this  country, 
though,  at  the  time  of  the  non-acceptance,  he  may  happen  to  be  abroad  ; 
nor  if,  at  the  time  of  dishonor,  he  have  returned  home  to  this  country. 
"  If,"  says  Lord  Ellenborongh,  "  the  party  is  abroad,  he  cannot  know 
of  the  fact  of  the  bill  having  been  protested,  except  by  having  notice  of 
the  protest  itself;  but,  if  he  be  at  home,  it  is  easy  f:r  him,  by  making 
inquiry,  to  ascertain  that  fact." 


OF    PROTESTING    AND   NOTING.  81 

And  it  is  now  decided  that  a  copy  of  the  pr:itest  need  not  in  any  case 
DC  sent. 

Proof  of  a  protest  of  a  foreign  bill  is  excv.sed,  if  the  drawer  had  no 
effects  in  the  hands  of  the  drawee,  and  no  reasonable  expectaticn  that 
the  bill  would  be  honored  ;  or  if  the  drawer  has  admitted  his  liability 
by  promising  to  pay.  "  By  the  drawer's  promise  to  pay,"  observes 
Lord  EUenborough,  "  he  admits  the  existence  of  everything  which  is 
necessary  to  render  him  liable.  When  called  upon  for  payment  of  the 
bill,  he  ought  to  have  objected  that  there  was  no  protest.  Instead  of 
that,  he  promises  to  pay  it.  I  must,  therefore,  presume  he  had  due 
notice,  and  that  a  protest  was  regularly  drawn  up  by  a  notary." 

And  it  is  said,  that  where  the  drawer  adds  a  request  or  direction,  that 
in  the  event  of  the  bill  not  being  honored  by  the  drawee,  it  shall  be 
returned  without  protest,  by  writing  the  words  "  retour  sans  protft" 
or  "  sans/rais,"  a  protest  as  against  the  drawer,  and  perhaps  as  against 
the  endorsers,  is  unnecessary. 

It  has  been  held,  that  a  protest  is  unnecessary  on  inland  bills,  except 
to  enable  the  holder  to  recover  interest ;  and  subsequent  and  uniform 
practice,  confirmed  by  a  late  decision,  has  settled  that  it  is  superfluous 
even  for  this  purpose. 

Foreign  bills  are  very  frequently  protested,  both  for  non-acceptance 
and  non-payment ;  but  a  protest  is  hardly  ever  made  for  non-acceptance 
of  an  inland  bill,  though  it  is  sometimes  protested  for  non-payment.  It 
is  conceived  that  a  protest  of  an  inland  bill  is  unknown  to  the  common 
law,  and  must,  therefore,  derive  its  efficacy  from  the  above  enactments  ; 
from  which  it  will  follow,  that  it  is  applicable  only  to  such  instruments 
as  are  therein  described,  and  that  the  steps  therein  required  must  be 
taken. 

The  loss  of  a  bill  is  no  excuse  for  the  absence  of  protest. 

In  an  action  against  the  drawer  of  a  foreign  bill,  protest  must  be 
averred  as  well  as  proved ;  and  it  has  been  held,  that,  if  a  protest  of  an 
inland  bill  be  set  forth  in  pleading,  it  must  be  proved.  But  this  decision 
proceeded  on  the  ground  that  an  allegation  of  protest  of  an  inland  bill 
involved  a  consequential  claim  for  interest  and  costs  ;  whereas  it  has 
been  since  decided,  that  such  a  claim  may  be  made  without  protest. 

In  an  action  on  a  foreign  bill,  presented  abroad,  the  dishonor  of  the 
bill  will  be  proved  by  producing  the  protest,  purporting  to  be  attested 
by  a  notary  public  ;  or,  if  there  is  not  any  notary  near  the  place, 
purporting  to  have  been  made  by  an  inhal  'tant,  in  the  presence  of  two 
witnesses. 

A  promise  to  pay  is  good  prima  facie  evidence  of  protest,  and  of 
notice  thereof. 


CONTENTS  OF  BYLES  ON  BILLS  OF  EXCHANGE. 


P«!fO 

1.     History  op  Bills  op  Exchanoe 6C 

II.  Of  Presentment  for  Acceptance.  —  Advisable  in  all  Ca.ses. — Necessary 
where  Bill  is  drawn  at  or  after  sight.  —  When  to  be  made.  — At  what  Hour.  —  Excused 
by  putting  Bill  in  Circulaliun.  — Or  by  other  reasonable  Cause.  — To  whom  it  should  ba 
made.  —  What  Time  may  be  giv^fcto  the  Drawee.  —  Consequence  of  Negligence  in 
Party  presenting.  — Proper  Course  for  Holder  when  Drawee  cannot  be  found,  or  is  Dead. 

—  Pleading, G-l 

III.  Of  Presentment  for  Payment.  —  How  made.  —  In  case  of  Bankruptcy  or 
Insolvency.  ^  Unnece.-ssary  to  charge  a  Guarantee.  —  In  ca.se  of  Drawee's  death.  —  Of 
Holder's  death.  —  When  to  be  made. — Time,  how  computed.  —  Months.  —  Days. — 
Bills  and  Notes  at  sight.  —  Usance.  —  Old  and  New  Style.  —  Days  of  Grace.  —  What  in 
ditferenl  Cnunlries.  —  How  reckoned.  —  Sundays  and  Holidays,  how  reckoned.  —  On 
what  Instruments  Days  of  Grace  allowed. — When  Presentment  of  Bills  payable  on 
Demand  is  to  be  made  — Of  a  common  Bill  of  Exchange  payable  on  Demand.  —  Of  a 
Check.  —  Of  a  common  Promissory  Note  payable  on  Demand.  —  Of  a  Bank  Note.  —  Of 
other  Bankers'  Paper.  —  When  no  lime  of  Payment  is  specified.  —  At  what  Hour. — 
Where,  when  a  Bill  is  made  payable  at  a  particular  place.  —Pleading.  —  When  a  Note 
:s  made  so  payable.  —  Consequence  of  not  duly  Presenting.  —  Presentment  not  neces- 
sary to  charge  Acceptor.  —  When  Neglect  to  Pre.sent  excu.sed.  —  Of  BiU  seized  under 
extent.  — By  circulating.  —  By  the  Absconding  of  the  Drawee.  —  By  Absence  of  Elfects 
in  the  Drawee's  hand.  — Not  by  Declaration  of  Acceptor  that  he  will  not  pay.  —  Advan- 
tage from  Neglect,  hnw  waived. —  Pleading.  —  Evidence  of  Presentment,      67 

IV.  Of  Paykent.  —  To  whom  it  should  be  made.  —  Of  Crossed  Checks. — To  a 
wrongful  Holder.  —  Effect  of  Payment  by  Acceptor  — by  Drawer  —  by  a  Stranger. — 
When  to  be  made  — At  what  Time  of  Day.  —  Subsequent  Tender.  —  Premature  Pay- 
ment.—  After  Action  brousht. — Payment  by  Notes  or  Checks.  —  What  Amounts  to 
Payment.  —  Legacy.  —  Appropriation  of  Payments.  — Part  Payment.  —  When  Payment 
will  be  presumed.  —  Evidence  of  Payment.  —  Of  delivering  up  the  Bill. — Of  giving  a 
Receipt.  —  Effect  of  Receipt.  —  Tender  of  Part  Payment.  —  Plea  of  Payment.  —  Retrac- 
tation of  Payment, 73 

V.  Of  Protesting  AND  Noting.  —  Protest  necessary  on  Foreign  Bills,  and  why. — 
By  whom  to  be  made. — Office  of  a  Notary.  —  When  to  be  made.  —  Where  to  be  made. 

—  Form  of  Proi-sst.  —  For  better  Security. — Noting,  what.  —  Notice  of  a  Protest. — 
Copy  of  Protest.  —  When  Protest  excused.  —Protest  of  Inland  Bills.  —  Pleading.  -E"i- 
i-iaci, 79 


BILLS   OF   EXCHANGE. 

BY  JOHN  RAMSEY  M'CULLOCH,  ESQ., 

AUTHOR    OF    THE    "  DICTIONARY    OF    COMMERCE,"    &0. 

^lu  foLjwiiig  observations  are  taken  from  Mr.  JSPCulloch's  Essays  on  Ex- 
change, Interest,  Money,  (f-c,  published  in  one  volume,  octavo,  by  Crosby 
4"  Nichols,  Boston;  a  work  which  should  be  in  the  hands  of  every  banker 
and  money  dealer.     Price  Seventy-five  Cents. 

1. LAWS    AND    CUSTOMS    RESPECTING    BILLS    AND    NOTES. 

A  BILL  of  exchange  may  be  defined  to  be  an  cpen  letter  of  request  or 
order  from  one  person,  the  drawer,  to  another  person,  drawee,  who  is 
thereby  desired  to  pay  a  sum  of  money,  therein  specified,  to  a  third 
person,  the  payee.  When  the  drawee  obeys  the  request  or  order,  by  sub- 
scribing the  document,  he  becomes  acceptor.  If  the  contrary  do  not 
appear  on  the  face  of  the  bill,  it  is  presumed  that  the  drawee  has  funds 
of  the  drawer^s  in  his  hands  to  the  amount  of  the  bill,  and  that  the 
drawer  is  indebted  to  the  payee  to  that  extent.  The  bill  thus  operates  as 
a  transfer  or  mercantile  assignment  to  the  payee,  of  the  drawee's  debt  to 
the  drawer.  But  a  bill  may  also  be  drawn  payable  to  the  drawer  or  his 
order,  in  which  case,  when  accepted,  the  document  is  not  an  assign- 
ment, but  merely  the  acknowledgment  or  constitution  of  a  debt.  This 
is  also  accomplishable  by  promissory  note,  which  is  a  promise  by  one  per- 
son, the  maker,  (Scotice  granter,)  to  pay  a  sum  to  another  person,  the 
payee  (Scotice  grantee.)  The  bill  and  the  promissory  note  have  now 
equally  the  privilege  of  being  assignable  or  transferable  from  one  person 
to  another  by  endorsement,  that  is,  by  the  payee  subscribing  his  name  on 
the  back  of  the  document.     In  this  case  the  payee  becomes  an  endorser 


84  BILLS    OF   EXCHAN&. 

and  the  person  in  whose  favor  the  endorsement  is  made  is  called  the 
endorsee,  who  may  again  endorse  to  another  ;  and  in  this  manner  the 
bill  or  note  may  pass  from  hand  to  hand  without  limitation.  Each 
endorsation  may  be  made  in  full  or  in  blank  ;  in  full,  by  filling  up  the 
name  and  description  of  the  party  in  whose  favor  it  is  made,  which  is 
attended  with  several  advantages  if  the  document  should  be  lost  or 
stolen  ;  in  blank,  by  merely  subscribing  the  endorser's  name,  which  is 
equivalent  to  making  it  payable  to  the  bearer.  All  the  endorsements,  or 
any  one  of  them,  may  also  be  qualified  by  the  words  rvithout  recourse ;  and 
when  this  is  done,  neither  the  endorsee  nor  any  subsequent  holder  of  the 
bill  or  note  can  have  recourse  on  the  endorser  who  thus  qualifies  his 
endorsation.  If  none  of  the  endorsations  be  so  qualified,  the  last  holder 
for  value,  and  in  bona  fide,  has  all  ihe  prior  endorsers  and  other  parties  to 
the  bill  or  note  bound  .o  him  jointly  and  severally.  He  may  select  any 
one  of  them,  or  proceed  against  them  all  at  the  same  time;  and  if  nil 
were  to  become  bankrupt,  he  could  claim  on  the  estate  of  each  for  the 
whole  debt,  and  be  entitled  to  receive  dividends  from  all  the  estate; 
ttntil  he  obtained  full  payment,  but  which  he  must  not  exceed.  An 
endorser  may  also  qualify  his  endorsation  by  the  condition  that  his 
endorsee  shall  not  have  the  power  of  making  an  endorsement  from 
himself. 

From  the  negotiability  thus  conferrsd  upon  them,  bills  have  been 
compared  to  bags  of  money  ;  but  if  should  be  remembered  that,  in  the 
former  case,  we  transfer  only  a  right,  in  the  latter  the  property  itself. 
The  comparison  is  best  supported  in  those  transferences  which  are  m.ade 
without  recourse,  since,  in  those  instances,  the  bill  passes  from  hand  to 
hand  without  any  alteiation  in  the  rights  and  duties  of  those  interested  in 
it,  and  without  any  one  acquiring  an  additional  security.  In  the  simplest 
case,  however,  the  rights  arising  on  a  bill  may  be  preserved  or  lost  by 
the  conduct  of  the  holder  ;  and  where  there  has  been  even  one  unquali- 
fied endorsation,  the  duties  of  the  holder  are  of  a  delicate  and  important 
nature.  But  these  will  be  more  readily  understood  after  we  have 
pointed  out  the  requisites  of  a  bill. 

11. REQUISITES    OF    A    BILL    OR    NOTE. 

The  general  requisites  of  a  bill  are,  that  it  must  be  payable  at  all 
events ;  that  it  must  be  for  payment  of  money  only ;  and  that  the 
money  must  not  be  payable  from  any  particular  fund.  Of  the  more 
special  requisites,  the  first  is,  that  any  bill  or  note  drawn  or  made  in 
Great  Britain,  (though  dated  abroad,  Chitty,  5th  edit.  p.  70,  7.  T.R.  601, 
4  Camp.  Larv,  2(59,)  or  in  its  colonies,  is,  that  it  be  written  on  paper 
stamped  according  to  the  law  of  the  mother  country  or  colony,  as  it  hap- 
pens to  be  drawn  in  the  one  or  the  other.     The   stamp  duty  varies 


?Z    J.    U     M  cULLOCH.  85 

accorCiiug  to  l\^  sum  in  the  bill,  and  the  extension  of  the  term  of  pay- 
ment ;  but  for  these  particulars,  and  the  mode  of  complying  with  the 
provisions  of  the  law,  reference  should  be  made  to  the  statutes  in  force 
at  the  time.  The  present  regulating  statute  is  that  of  55  Geo.  III.  c 
184,  both  as  to  inland  bills  and  notes,  and  bills  of  exchange  drawn  hei% 
fin.  foreign  countries.  As  to  bills  truly  drawn  in  foreign  states  not 
;olonies  of  Great  Britain,  on  traders  in  this  country,  our  law  takes 
no  cognizance  of  them  as  to  whether  they  are  or  are  not  stamped  ;  but 
promissory  notes  made  out  of  Britain  are  declared  not  to  be  negotiable  or 
payable  unless  stamped  agreeably  to  our  laws.  Bills  drawn  at  home 
must  also  be  written  on  tlie  stamp  appropriated  for  bills.  If  on  a  stamp 
of  another  denomination,  though  of  equal  or  superior  value,  they  are 
invalid  if  not  got  re-stamped,  which  they  may  be  for  payment  of  the 
duty  and  a  penalty  of  40s.  when  carried  to  the  stamp-office  before  they 
are  due,  but  when  after  due,  the  penalty  is  .£10.  If  written  on  a  stamp 
below  the  proper  value,  a  penalty  is  incurred  of  £50,  and  the  bills, 
besides,  are  Jiull  (Bell's  Com.  on  Bankrupt  Law,  vol.  ii.  p.  249  ;)  but  it 
bas  been  found  with  us  in  England,  that  if  a  bill  be  not  properly 
stamped,  a  neglect  to  present  for  acceptance  or  payment  will  not  relieve 
parties  who  are  otherwise  liable  in  the  original  debt  in  respect  of  which 
the  bill  was  granted.  The  relief  in  this  case  is  granted  by  a  court  of 
equity,  but  this  relief  is  not  extended  to  remote  endorsers  not  respon- 
sible for  the  original  debt.  Relief,  however,  is  given  when  a  party  has 
bound  himself  to  grant  a  valid  note  or  bill,  but  gives  one  by  mistake  or 
design  on  a  defective  stamp.  Negotiable  bills  under  £5  must,  by  37 
Geo.  III.  c.  32,  be  payable  within  twenty-one  days,  and  bear  the  name 
of  the  place  where  they  are  made,  without  which  also  checks  on  bankers 
are  liable  to  stamp  duty.  Penalties  are  likewise  imposed  on  the  post- 
dating of  such  checks,  or  of  bills,  for  the  purpose  of  reducing  the  duty  by 
apparently  shortening  the  term  of  payment ;  and  there  are  provisions  in 
those  laws  respecting  bills  drawn  in  sets  or  otherwise,  with  which  every 
trader  should  make  himself  acquainted.  This,  however,  it  is  very  diffi- 
cult to  do  in  all  its  bearings,  since  the  penalties  and  provisions  of  the 
prior  statutes  are  retained  in  every  subsequent  one,  except  as  therein 
specially  altered.  This  is  one  great  evil  of  our  fiscal  regulations. 
Where  the  law  cannot  be  known,  transactions  are  rendered  uncertain, 
property  insecure,  and  litigation  is  increased  to  a  mischievous  extent. 
But  the  worst  evil  is,  that  this  state  of  law  increases  in  a  prodigious 
degree  the  influence  of  the  crown,  by  the  power  over  traders  which  is 
thus  placed  in  the  hands  of  solicitors  of  stamps,  excise,  customs,  and 
other  crown  officers. 

The  other  requisites  of  a  bill  are,  2dly,  That  it  should  bear  the  name 
of  the  place  at  which  it  is  made  or  drawn ;  and  if  the  street  and  number 
of  the  house  be  added,  it  is  easier  'o  give  and  receive  the  notices  tha* 
8 


86  -  BILLS    OF    EXCHANGE. 

may  be  necessary,  in  proper  time.  3dly,  The  date  should  be  distinctly 
marked,  and,  \i  written  at  length,  a  higher  protection  would  be  afforded 
against  accidental  or  intentional  alterations  and  vitiations.  If  a  bill 
have  no  date,  the  date  of  issuing  will  be  held  as  the  date  of  the  bill. 
4thly,  The  time  of  payment  should  be  clearly  expressed,  and  a  time 
certain  is  necessary  to  make  the  document  negotiable  ;  that  is  to  say,  the 
payment  must  not  depend  on  an  event  that  may  never  happen,  such  as 
the  marriage  of  a  person,  though  it  may  on  the  death.  5thly,  The  place 
at  which  a  bill  is  made  payable  should  also,  for  the  sake  of  safe  nego- 
tiation, be  distinctly  stated  j  because  at  that  place  presentment  must  be 
made  both  for  acceptance  and  payment.  If  no  place  be  mentioned,  the 
place  of  doing  business,  if  the  acceptor  have  one,  or  otherwise  his  dwell- 
ing-house, becomes  the  place  of  presentment.  6thly,  The  sum  pay- 
able should  be  clearly  written  in  the  body  of  the  bill,  and  the  super- 
scription of  the  sum  in  figures  will  aid  an  omission  in  the  body.  Vthly, 
It  should  contain  an  order  or  request  to  pay.  8thly,  Of  bills  drawn 
in  parts  or  sets,  each  part  or  copy  should  mention  the  number  of  copies 
used,  and  be  made  payable  on  condition  that  none  of  the  others  has  been 
paid.  The  forger!/  of  an  endorsement  on  one  of  the  parts  passes  no  inter- 
est even  to  a  bona  fide  holder,  and  will  not  prevent  the  payee  from 
recovering  on  the  other  part.  9thly,  Every  bill  should  specify  dis- 
tinctly to  whom  the  contents  are  to  be  paid  ;  but  a  bona  fide  holder,  or 
his  executor,  may  fill  up  a  blank,  if  one  be  left,  for  the  name  of  the 
payee,  and  recover  payment.  (Chitty,  82.;  Bell,  vol.  ii.  p.  251,  &c.) 
lOthly,  If  it  be  intended  that  a  bill  is  to  be  negotiable,  it  should  contain 
the  operative  words  of  transfer  "  to  order  ; "  (Chitty,  86.)  llthly.  It  is 
advisable  in  all  cases  to  insert  value  received  ;  since,  without  these  words, 
the  holder  of  an  inland  bill  for  upwards  of  £20  could  not,  in  England, 
recover  interest  and  damages  against  the  drawer  and  endorser  in  default 
of  acceptance  or  payment.  Bills  bearing  for  value  received,  and  pay 
able  after  date,  seem  also  to  possess  advantages  when  lost,  under  the 
statutes  9  and  10  W.  III.  c.  17 ;  but  equity  would  probably  extend  these 
to  endorsements ;  and  3  and  4  Anne,  c.  9,  it  is  thought,  extends  the 
same  notes.  (Chitty,  p.  196.)  12thly,  As  to  foreign  bills,  the  drawee 
should  attend  to  whether  they  are  to  be  paid  with  or  without  furthei 
advice ;  since  the  propriety  of  his  accepting  or  paying  will,  in  the  one 
case,  depend  on  his  having  received  advice.  The  more  carefully  all 
these  requisites  are  attended  to,  the  greater  is  the  security  of  all  con- 
cerned against  accidents  and  litigation.  But  traders,  we  fear,  have  too 
generally  a  prejudice  in  favor  of  that  brevity  which  approaches  to  loose- 
ness of  expression,  and  against  that  precision  which  alone  can  keep 
them  out  of  difficulties. 


^v  J    R.  m'culloch.  87 


III. —  -GENERAL    EXPLANATORY    NOTES    AND    USAGES. 

Business  Hours.  —  Ettles  of  giving  Notices.  —  Effect  of  Inevitable  AcAdeitt. 
—  Hoiv  to  act  when  Bill  lost.  —  Effect  of  Usury.  —  Effect  of  Gaming.  — 
Effect  of  Forgery.  —  Effect  of  Vitiation.  —  Acceptance  by  Procuration.  — 
Conditional  Acceptance.  —  Endorsements. 

When  a  bill,  check,  or  note,  is  payable  on  demand,  or  when  no  time 
of  payment  is  expressed,  it  should  be  presented  within  a  reasonable  time 
after  receipt,  and  is  payable  on  presentment,  without  the  allowance  of  any 
days  of  grace.  It  is  yet  unsettled  (Chitty,  3-41,  et  seq.)  whether  bills 
drawn  at  sight  are  entitled  to  days  of  grace,  though  the  weight  of 
authority  is  rather  in  favor  of  them.  If  drawn  at  one  or  more  days  after 
sight,  the  days  of  grace  must  be  allowed.  The  day  on  which  a  bill  is 
dated  is  not  reckoned  one ;  but  all  bills  having  days  of  grace,  become 
due,  and  must  be  presented  and  protested,  on  the  third  day,  and  if  that 
day  be  a  Sunday  or  a  holiday,  on  the  second.  The  rule  for  giving  notice 
of  non-acceptance  or  non-payment  is  different,  since,  if  the  day  on 
■which  it  should  have  been  given  be  a  day  of  rest,  by  the  religion  of  the 
tjarty,  such  as  the  Jews'  Sabbath,  the  notices  will  be  good  if  given  on 
th-i  next  day.  Calendar  months  are  always  understood  with  respect 
to  bills  ;  and  if  dated  on  the  29th,  30th,  or  31st  of  January,  payable  one 
nwnth  after  date,  they  will  fall  due  on  the  last  day  of  February,  from 
which  the  days  of  grace  are  to  be  calculated.  Presentments  of  bills 
should  be  made  within  business  hours.  These  are  generally  consid- 
ered to  be  in  London  from  nine  morning  till  six  evening,  but  a 
protest  has  been  held  good  against  an  ordinary  trader  when  made  at 
eight.  This  would  not  have  been  good  in  the  case  of  bankers,  whose 
hours  (from  nine  to  five  in  London)  must  be  attended  to.  In  Edinburgh, 
bankers'  hours  are  from  ten  to  three  ;  traders  from  ten  to  three,  and  from 
six  to  eight ;  but  there  are  no  Scotch  decisions  holding  these  as  the 
only  business  hours.  A  verbal  notice  of  the  dishonor  of  an  inland  bill 
is  good  ;  but  as  such  notice  is  always  matter  of  parole  evidence,  v^ 
better  in  every  case  to  give  notice  in  writing,  and  the  regular  mode  of 
doing  so  is  by  post.  Such  notice,  if  put  into  the  general  post-office,  r~ 
an  authorized  receiving  house,  is  good  though  it  miscarry,  provided  the 
letter  be  regularly  booked,  and  reasonable  proof  be  made  of  its  having 
been  put  into  the  post-office.  If  given  only  to  a  bellman  in  the  street, 
would  not  in  such  a  case  be  good.  "When  there  is  no  post,  the  ordinarj 
mode  of  conveyance,  such  as  the  first  ship  or  carrier,  is  sufficient.  As 
10  foreign  bills,  notices  of  dishonor,  with  the  respective  protests,  must  be 
despatched  by  post  on  the  day  when  the  bills  become  due,  or  on  which 


SS  BILLS    OF    EXCHANGE. 

acceptance  was  refused,  if  any  post  or  ordinary  conveyance  set  out  that 
day,  and  if  not,  by  the  next  earliest  conveyance.  (Chitty,  291.)  As  to 
inland  bills,  notice  should  be  made  by  the  first  post  after  the  expiry  of 
a  day,  when  the  parties  reside  at  a  distance  ;  if  in  the  same  town,  it  is 
enougli  if  the  notice  be  made  so  as  to  be  received  within  business  hours 
of  the  following  day,  and  this  may  be  done  by  the  twopenny  or  penny 
post,  if  receivable  within  the  time  mentioned.  When  a  holder  deposits 
his  bill  at  his  banker's,  the  number  of  persons  entitled  to  notice  is 
increased  by  one  ;  and  each  party  in  succession  is  entitled  to  twenty-four 
hours  for  giving  notice,  (6  East.  3  Bell,  263.)  Such  notice,  as  to  inland 
bills,  is  necessary  in  England  for  preserving  recourse  as  to  the  princi- 
pal sum  only.  If  protest  be  made  and  notice  given  within  fourteen 
days,  the  recourse  is  preserved  as  to  interest,  damages  and  expenses.  la 
Scotland  a  protest  is  necessary  in  every  case,  and  there  is  no  distinction 
made  as  to  the  mode  of  recourse  between  principal  and  interest ;  but 
intimation  to  the  drawer  vfiihrn  fourteen  days  preserves  recourse  for  the 
whole  (Bell,  vol.  ii.  p.  265  ;)  and  it  has  been  decided,  that  notice  of  an 
endorser  may  be  good  even  after  the  fourteen  days,  if  there  has  been 
no  unnecessary  delay.  (Fac.  Col.  2d  June,  1812.)  But  this  applies  only 
to  inland  bills,  and  a  bill  drawn  from  Scotland  upon  England  is  in  Scot- 
land held  to  be  foreign.  (Bell,  vol.  ii.  p.  265.)  Every  bill  should  be 
presented  for  payment  on  the  day  upon  which  it  falls  due,  unless  that 
be  rendered  impossible  by  some  unforeseen  and  inevitable  accident,  such 
as  shipwreck,  or  sudden  illness,  or  death.  To  preserve  recourse,  the 
accident,  and  the  presentment  of  the  bill  as  soon  as  possible  afterwards, 
must  be  intimated  without  delay,  and,  if  denied,  proved  by  the  party 
who  seeks  recourse.  The  same  doctrine  will  hold  as  to  presentments  for 
non-acceptance  and  notices  of  dishonor.  But  the  loss  or  destruction  of 
a  bill  is  no  excuse  for  not  demanding  payment  and  protestir  g ;  the  pro- 
test in  that  case  being  made  upon  a  copy  or  statement  of  the  bill,  if  the 
party  who  has  a  right  to  hold  the  bill  has  it  in  his  power  to  make  such 
a  statement.  If  the  destruction  of  the  bill  can  be  proved,  action  will  be 
sustained  in  a  court  of  law  ;  if  not,  the  redress  is  got  upon  giving  an 
indemnity  in  a  court  of  equity  ;  but  as  equity  will  not  interfere  where 
law  caUj  it  is  of  importance,  in  such  a  case,  and  indeed  in  a'l  cases  of 
difficult/,  to  resort  at  once  to  the  best  professional  advice.  Inconsider- 
ate attempts  to  remedy  neglects,  or  cure  what  is  defective,  generally 
make  the  case  worse,  and  often  implicate  character.  Cases  of  great 
hardship  and  difficulty  frequently  arose  on  bills  granted  partly  for  usu- 
riovs  consideration.  A  mighty  benefit,  however,  has  now  been  conferred 
by  the  statute  58  Geo.  III.  c.  93,  which  enacts,  "  That  no  bill  of  ex- 
change or  promissory  note  that  shall  be  drawn  or  made  after  the  passing 
of  this  act  shall,  though  it  may  have  been  given  for  a  usurious  consid- 
eration, or  upon  a  usurious  contract,  be  void  in  the  hands  of  an  endorse 


BY  J.  R.  m'culloch.  89 

for  valuable  consideration,  unless  such  an  endorsee  had,  at  the  time  of 
discounting  or  paying  such  consideration  for  the  same,  actual  notice  that 
such  bill,  fee,  had  been  originally  given  for  a  usurious  consideration,  or 
upon  a  usurious  contract."  It  is  much  to  be  regretted  that  the  same 
protection  was  not  extended  by  this  statute  to  the  innocent  holder  of  a 
bill  granted  for  a  game  debt.  Such  bills  are  still  void  in  the  hands  of  a 
bona  fide  endorsee.  In  Scotland  it  has  been  decided  otherwise  (25th 
January,  1740,  Nielson  ;  Bell,  vol.  ii.  p.  210.)  The  rage  for  legislation 
has  not  yet  extended  itself  to  lawyers,  who,  as  a  body,  can  hardly  be  ex- 
pected to  display  any  anxiety  to  remedy  any  defects  which  add  to  their 
emoluments  and  consequence.  How  much  of  the  learning  of  this  pro- 
fession is  wasted  on  niceties  and  difficulties  that  would  readily  yield  to 
the  spell  of  an  act  of  parliament!  To  the  law,  however,  we  owe  this 
sound  maxim,  that,  "unless  it  has  been  so  expressly  declared  by  the 
legislature,  and  it  formerly  was  in  the  case  of  usury,  and  still  is  as  to 
bills  for  game  debts,  illegaUty  of  consideration  will  be  no  defence  ii.  an 
action  to  the  suit  of  a  bona  fide  holder,  without  notice  of  the  illegality, 
unless  he  obtained  the  bill  after  it  became  due."  (Chitty,  105.)  Thus 
forgery  does  not  vitiate  a  bill.  The  forged  document  is  good  to  and 
against  all  parties  but  those  whose  names  are  forged.  Against  one 
whose  name  is  forged,  it  is  true,  it  will  neither  support  an  action  nor 
ground  a  claim  ;  "  yet  if  he  have  given  credit  to  acceptances  or  endors- 
ations  as  binding  on  him,  forged  by  the  same  hand,  he  will  be  liable." 
(3  Esp.  N.  P.  50  ;  2  Bell,  250.)  Subsequent  approbation  also  does 
away  an  objection  on  the  head  of  forgery  or  fraud,  and  generally  all  sorts 
of  objections  otherwise  competent.  This  doctrine  holds  as  to  vitiations 
when  the  stamp  laws  are  not  concerned ;  but  without  the  consent  of 
parties,  all  vitiations  or  alterations  of  bills  in  material  parts  are  fatal. 
(2  Bell,  252.)  A  clerk  or  servant  may  accept  a  bill  for  his  master  if 
authorized  to  so  do ;  and  authority  will  be  inferred  from  a  sanctioned 
practice.  The  law  on  this  point  is  dangerous,  and  would  require  legis- 
lative revision.  If  the  servant  or  agent  do  not  explain  the  character  in 
which  he  acts,  but  subscribes  his  own  name  simply,  he  will  bind  him- 
self, not  his  employer.  An  acceptor  may  enlarge  the  term  of  payment, 
or  accept  for  a  part,  or  under  any  other  condition  not  expressed  in  the 
bill ;  but  in  that  case  it  is  optional  in  the  holder  to  take  the  acceptance 
as  thus  offered,  or  to  proceed  as  if  no  such  offer  had  been  made  ;  if 
rejected,  the  protest  should  bear  the  condition,  and  the  rejection  of  it ;  it 
should  also  be  kept  in  view,  that  a  holder  who  accepts  of  a  limited  or 
conditional  acceptance,  liberates  the  drawer  and  prior  endorser,  unless 
he  have  their  consent.  Blank  endorsements  are  held  to  be  of  the 
date  of  the  bill,  until  the  contrary  is  proved.  Endorsements  after 
the  term  of  payment,  though  for  value,  do  not  protect  the  endorsers  like 
endorsements  before  maturity  j  very  slig'  t  evidence  is  admitted  as  proof 
8* 


90 


BILLS    OF    EXCHANGE. 


of  knowledge  of  dishonor,  and  the  holder  in  that  case  becomes  liable  to 
all  exceptions  which  can  be  stated  against  the  right  of  his  immediate 
endorser,  or  the  person  who  held  the  bill  when  it  became  due.  When 
acceptance  is  refused,  and  the  bill  returned  with  protest,  action  may  be 
raised  immediately  against  the  drawer,  though  the  regular  time  of  pay- 
ment is  not  arrived.  His  debt,  in  such  a  case,  is  considered  as  cou- 
tracted  the  moment  the  bill  was  drawn  ;  if  the  date  of  the  bill  be  prior 
to  that  of  a  commission  of  bankrupt,  the  debt,  in  such  a  case,  may  be 
claimed  upon.  As  to  current  bills  and  contingent  claims,  the  case  is 
unfortunately  different ;  in  these  respects  England  might  derive  great 
help  from  the  law  of  Scotland. 

IV. DUTIES    OF    DRAWEE. 

The  Irawee,  who,  having  funds,  refuses  to  accept,  is  responsible  for 
the  c  jnsequences  to  the  drawer,  and  may  also  be  sued  for  payment  by 
the  payee  or  holder,  the  presentment  and  protesting  of  the  bill  for  non- 
acceptance  operating  as  an  intimated  assignment  and  complete  transfer 
of  the  debt  to  the  holder,  who  in  Scotland  is  preferred  to  any  subsequent 
arrester.  The  drawee  who  has  no  funds  is  not  bound  to  accept ;  but, 
after  protest  for  non-acceptance,  he  may  accept  supra-protest,  for  the 
honor  of  the  drawer  and  endorsers,  or  either  of  them.  A  third  party  may 
thus  accept  for  honor  supra-protest ;  and  whoever  does  so,  if  he  give 
immediate  notice  and  send  off  the  protest,  may  have  immediate  recourse 
on  the  party  or  parties  for  whose  honor  he  has  interfered. 

V.  — PAYEE    OR    HOLDER. EFFECT    OF    BANKRUPTCY. — ACCOMMO- 
DATION   PAPER.  —  CROSS    PAPER. 

It  is  the  duty  of  a  payee,  when  directed  by  the  drawer,  and  of  every 
one  who  is  merely  an  agent  for  the  owner,  though  acting  gratuitously,  to 
present  a  bill  for  acceptance.  The  time  thought  reasonable  for  this 
purpose  is  twenty-four  hours,  or  at  least  within  business  hours  of  the 
day  following  that  on  which  the  bill  was  received.  It  is  prudent  in  all 
holders  of  a  bill  to  present  for  acceptance  within  this  period ;  and  in  all 
cases  where  presentment  is  made,  and  acceptance  refused,  notice  should 
be  given  to  all  to  whom  it  is  meant  to  preserve  recourse.  A  draft  may 
be  left  twenty-four  hours  with  the  drawee,  if  no  post  go  out  in  the  mean 
time ;  but  if  he  intimate  within  that  time  that  he  will  not  accept,  or  ask 
more  time  to  consider,  notice  should  be  given.  (Chitty,  288,  289.)  A  ver- 
^'al  acceptance,  if  it  can  be  proved,  or  one  by  a  separate  writing,  binds 
ihe  drawee  ;  but  in  Scotland  none  but  a  written  acceptance  on  a  bill 
will  authorize  the  usual  summary  diligence.  (Chitty,  217,  270 ;  2  Bell, 
69,  210.)  If  the  diawee  had  no  funds,  notice  to  the  drawer  is  not  neces 
ary  j  but  as  the  not  having  fi.ads  is  a  matter  of  fact  to  be  proved,  it  i-s 


BY    J.    R.    m'cULLOCII.  91 

safer  in  ihis,  and  indeed  in  all  other  cases,  to  give  the  usual  and  regular 
notice.  When  a  bill  is  drawn  at  some  certain  time  after  sight,  present- 
ment is  nectssary  to  fix  the  term  of  payment.  Respecting  bills  of  this 
description,  both  foreign  and  inland,  the  general  rule  is,  that  due  dili- 
gence must  be  used.  Foreign  bills,  so  drawn,  may  be  put  into  the  circu- 
lation without  acceptance,  as  long  as  the  convenience  of  the  successive 
holders  requires ;  and  it  has  been  found  not  to  be  laches  (in  Scotland 
mora,  or  undue  delay)  to  keep  a  bill  (at  three  days'  sight)  out  in  the 
circulation  for  twelve  months  ;  but  if,  instead  of  circulating,  a  holder 
were  to  lock  it  up,  this  would  be  laches.  An  unacceptable  inland  bill 
may  also  be  put  in  circulation  ;  and  any  holder,  who  does  not  circulate 
it,  has  a  reasonable  time,  such  as  the  fourth  day  respecting  a  bill  drawn 
within  twenty  miles  of  London,  for  presenting  it  there  for  acceptance. 
Despatch  and  attention,  however,  are  always  advisable.  It  is  said  that 
when  a  bill  has  been  already  protested  for  non-acceptance,  and  due 
notice  thereof  given,  it  is  not  necessary  to  protest  or  to  give  notice  on 
account  of  nr,n-payment ;  but  it  is  usual  to  do  so,  and  the  safer  practice. 
The  same  rules  ind  the  same  time  should  be  observed,  as  to  non-pay- 
ment, that  ari  observed  as  to  protest  and  notice,  in  the  case  of  non-ac- 
ceptance. When  inland  bills  are  made  payable  on  a  day  named  and 
fixed  in  the  bills,  it  is  common  to  delay  presenting  them  for  acceptance 
until  they  can  also  be  presented  for  payment,  and  then,  if  necessary,  to 
protest  for  both  ;  but  it  is  better  to  make  a  presentment  for  acceptance 
as  soon  as  it  can  be  done  in  the  ordinary  course  of  business.  It  has 
already  been  stated,  that  notice  either  of  non-acceptance  when  a  present- 
ment has  been  made,  or  for  non-payment,  must  be  given  io  all  the  parties 
to  whom  the  holder  intends  to  resort  for  payment.  Bankruptcy  is  no 
excuse  for  neglecting  any  step  in  the  negotiation  of  a  bill.  If  a  party 
be  bankrupt,  notice  of  recourse  should  be  given  to  him  and  his  assign- 
ees; if  dead,  to  his  executor  or  administrator;  if  abroad,  the  notice 
should  be  left  at  his  place  of  residence,  if  he  have  one,  and  a  demand  of 
acceptance  or  payment  (when  that  is  necessary)  should  be  made  of  his 
wife  or  servant.  Notice  should  also  be  made  to  one  who  merely  guar- 
antees payment ;  and  a  person  who  subscribes  a  bill  not  addressed  to 
him  is  held  to  be  a  collateral  security.  If  notice  be  made  to  one  en- 
dorser, he  may  give  notice  to  prior  endorsers,  or  to  the  drawer;  and,  if 
done  timely,  it  will  be  available  to  the  holder ;  but  notice  by  a  party  not 
party  to  the  bill,  nor  agent  for  a  party,  will  not  be  available. 

Accommodation  bills  are  subject  to  the  same  rules  as  other  paper, 
except  among  those  who  agree  to  lend  their  names  or  credit.  Among 
them  the  rule  is,  that  he  for  whose  use  the  money  is  to  be  raised  shall 
provide  for  the  bill ;  but  as  all  the  others  have  an  action  of  relief  when 
forced  to  pay,  they  are  entitled  to  notice.  In  Scotland  this  has  been 
extended  to  the  drawer  when  he  is  not  the  party  for  whom  the  credit 


92  BILLS   OF   EXCHANGE. 

was  intended.  With  respect  to  cross  paper,  it  is  hela  that  mutual 
accommodations  exchanged  are  good  considerations  for  each  other  ;  that 
in  case  of  bankruptcy,  a  dividend  from  any  one  estate  is  to  be  held  as 
payment  of  all  that  can  be  demanded  in  respect  of  that  debt ;  and  that 
there  can  be  no  double  ranking  of  the  same  debt.  But  questions  often 
arise  in  such  cases,  which  require  the  utmost  professional  skill  to  com 
prehend  and  decide.  In  a  short  digest  of  this  nature  it  is  impossible  to 
enter  into  the  niceties  of  legal  questions  ;  and  we  can  only  observe,  gen- 
erally, that  parties  should  never  act,  in  cases  of  difficulty,  without  taking 
the  best  professional  assistance. 

The  lam  respecting  bills  of  exchange  is  more  consonant  with  reason 
than  almost  any  other  branch  of  our  law,  since,  where  it  is  silent,  re- 
course is  had  to  the  custom  of  merchants. 

The  best  authorities  respecting  the  law  of  bills  are  the  treatises  of 
Chitty  and  of  Eayley  as  to  the  English  law,  and  Mr.  Bell's  Commentariei 
m  Mercantile  Jurisprudence  as  to  Scotch  law. 


FOREIGN  BILLS   OF   EXCHANGE. 


Fonns  of  Bills  of  Exchange  ordinarily  used  in  the  French,  German,  Dutch, 
Italian,  Spanish,  Portuguese,  Swedish  and  Banish  language  . 

As  many  bills  drawn  in  foreign  languages  pass  through  the  hands  of 
numerous  bankers,  it  may  be  useful  to  give  a  list  ci  some  of  those  words 
which  express  the  amount  and  the  time,  the  two  main  points  in  a  bill 
of  exchange :  — 


English, 

One 

Two    Three 

Sixty 

Ninety. 

German, 

Ein 

Zwei    Drei 

Sechzig 

Neunzig. 

Dutch, 

Een 

Twee  Drie 

Zestig 

Negentig. 

French, 

Un 

Deux   Trois 

Soixante 

Quatre-vingt-dix 
or  Nonante. 

Italian, 

Uno 

Due     Tre 

Sessanta 

Nonanta,  or  Novanta 

Spanish, 

Uno 

Dos      Tres 

Sesenta 

Noventa. 

Portuguese 

,  Hum 

Dous   Tres 

Secenta 

Noventa. 

Swedish, 

En 

Twa    Tre 

Sexti 

Nitti. 

Danish, 

Een 

To       Tre 

Tredsindstyve  Halvfemtesindstyve. 

English, 

Two  months  after  date. 

Three  days  after  sight. 

German, 

Zwei  monate  nach  dato 

Drei 

tage  nach  sicht. 

Dutch, 

Twee 

maanden  na  dato 

Drie 

dagen  na  zigt. 

French, 

A  deux  mois  de  date. 

A  trois  jours  de  vue. 

Italian,         A  due  mesi  dopo  data. 

o       -7  (A  dos  meses  de  la  fecha. 

Sp(t7nsh,  {   A    ,  J  . 

'  (A  dos  meses  data. 

Portuguese,  A  dous  mezes  de  data. 

Swedish,       Twa  manander  ifran  dato. 

Danish,        To  maander  efter  dato. 


A  tre  giorni  vista. 

A  tre  giorni  dopo  vista. 

A  tres  dias  vista. 

A  tres  dias  vista. 
Tre  dagar  efter  sigt. 
Tre  dage  efter  sigt. 


In  all  the  above  languages,"  at  sight"  is  usually  expressed  by  a  vista 
except  the  French,  which  expresses  it  ty  a  vue.  "At  usance"  is  ex- 
pressed by  a  uso  or  ad  uso.  The  names  of  the  months  so  nearly  resemble 
the  English,  that  a  mistake  can  but  rarely  occur. 


94  FOKEIGN    BILLS    OF    EXCHANGE. 

The  following  r.re  forms  of  bills  in  each  of  the  languages  named :  — 

French. 
Lille,  le  28  Septembre,  1848.  Bon  pour  £l58  9  Sterlings. 

Au  vingi-cinq  D6cembre  prochain,  11  voiis  plaira  payer  par  ce  mandat  d 
I'ordre  de  nous-mimes  la  somme  de  cent  cinquanle-huit  livres  sterlings  9  schel- 
lings  valeur  en  nous-memes  et  que  passerez  suivant  I'avis  de 


A  Messieurs 

a  Londres. 

German. 
Nurnherg,  den  28  October,  1848.  Pro  £lOO  Sterling. 

Zwci  monate  nach  data  zahlen  Sie  gegen  diesen  Prima  Wechsel  an  die  Or- 

dm  des  Herrn Ein  Hundcrt  Pfund  Sterling  cfen 

Werth  erhalten.     Sie  brlngen  seiche  auf  Rechnung  laut  Bericht  von. 


Herren 


London. 

Dutch. 
Grouw,  den  ls<  November,  1848.  Voor  £59  17  6 

Twee  maanden  na  dato  gelieve  UEd  te  betalen  voor  dezen  onzen  prima 
Wisselbrifif  de  secunda  niet  belaald  zynde  aan  de  ordre  van  de  Heeren  ■ 

negen  d^  vyftig  Ponden  zeventien  schelling  en  zespences  sterling,  de  waarde  in 
rekening  UEd  stelle  het  op  rekening  met  of  zander  advys  van 


de  Heer 


te  London. 

Italian. 
Lirnrno,  le  25  Settembre,  1848.  Per  £500  Sterline. 

A  Tre  mesi  data  pagate  per  qucsta  prima  de  Camhio  {una  sol  volta)  all'  ordine 

,  la  somma  di  Lire  cinque  cento  sterline  valutn 

camblata,  e  ponete  in  conto  M.  S.  secondo  I'avviso  Addio. 

Ai 

Tjondra. 


FOREIGN    BILLS    OF  EXCHANGE.  95 

Spanish. 

Malaga,  d  20  de  Sdb'-'  dc  1843.  Son  £3U0. 
A  novenla  dias  Jecha  se  serciran  V'  mandar  poffar  por  est<   primcra  de  cam- 
bio  d  la  orden  de  los  S"' Tres  cicntas  libras  Esterlinaa 

en  oro  o  plata  valor  redbido  de  dhos  S^"  que  anotaran  valor  en  cuenta  scffun 
aviso  dc 


A  los  S^" . 


Ltondres. 


PoRTTTaUESE. 

£600  Esterlinas.  Lisbon,  aos  3  Dezembro  de  1343. 

A  Scsscnta  dias  de  vista  precizos  poffard  V por  ata 

nossa  unica  via  de  Letra  Scgura,  d  nos  ou  d  nossa  Ordem  a  quantia  acima  de 
Seis  Centas  Livras  Esterlinas  valor  de  nos  recebido  em  Fazendas,  que  passera 
em  Comia  seff-undo  o  aviso  de 


Ao  Sen"- . 


Londres. 


Swedish. 

Bjorneberg,  den  23  September,  1848.  For  £  Slerl.  100 

Nittio  Dagar  efter  dato  behagade  H.  H.  emot  denna  prima   Wexel  {secutvaa 

obctald)  bctala  till  Herr  elle  ordres  Etthundra  funii 

Sterling  som  stalles  i  rakning  enligt  avis. 


Hcrrar. 


London. 


Danish. 

Kjobenhavn,  9  December,  1848.  Rbae  4,000. 

7Ve  maaneder  efter  dato  behager  de  at  betale  denne  Prima  Vexel,  Secunda 

ikke,  til  Herr eller  ordre  med  Fire  Tusiride  Rigsbanh 

Daler,  Validta  modtaget  og  stilles  i  Regning  ijhlge  advis. 

Herrer 

London. 


FORMS  OF  NOTICE  OF  PROTEST. 


Th;  following  forms  have  been  prepared  after  careful  investigations 
of  the  subject,  and  w*ilh  a  view  to  combine  all  the  information  requ^rer. 
Dy  the  latest  decisions  of  the  State  Courts  • 


Form  ttsed  by  the  Notary  of  the  Phenii  Bank,  New  York,  1847. 

$ Neto  York, 184 

Please  to  take  notice  that  a  promissory  Note  for  % ,  made  by 

,  endorsed  by  you,  having-  been  duly  presented  and 

payment  thereof  demanded,  which  was  refused,  is  therefore  protested  for  non 
payment,  and  that  the  holders  look  to  you  for  payment  thereof. 

. Notary  Public. 


Form  of  Notice  used  by  the  Notary  of  the  Philadelphia  Bane. 


Philadelphia,  185 


Payment  of —  note  in  favor  of  — 

and  by  endorsed,  for  S  . ,  dated 

delivered  to  me  for  protest  by  the Bank  of 


Philadelphia,  being-  this  day  due,  demanded  and  refused,  it  Aos  been  by  m* 
duly  protested  accordingly,  and  you  will  be  looked  to  for  payment,  of  which 
jou  hereby  have  notice. 

Notary  Public, 


FORMS    OF    NOTICE    OF    PROTEST.  91 

Form  used  by  tue  Notaky  of  the  Bank  of  Virginia. 
t Richmond,    Va.,  185 

Take  notice  that note  for  $ ,  doled  the 

__^^__^^___  day  of ,  185   ,  and  payable days 

after  d(de,  to  the  orda-  of ,  at  the Bank 

of  Virginia,  and  endorsed  by ,  being  due  and  unpaid, 

the  same  was  presented  by  me  at  said  Bank ,  and 

payment  thereof  then  and  there  demanded,  which  was  refused.  Whereupon  the 
said  note  was  dishonored,  and  I  duly  protested  the  same  for  non-payment,  and 
the  holders  look  to  you  for  payment,  as  endorser  thereof  for  principal,  intcresi, 
damages  and  costs. 

Done  at  the  request  of  the  Cashier  of  the  Batik  of  Virginia. 

Notary  Public. 


Form  adopted  by  the  Cayuga  County  Bank,  New  York. 
Auburn, 1850. 


Sir,  — Take  notice  that  a  promissory  note  made  by  , 

to  order  of ,  for  . .  dollars, 

dated at after  date,  this  day  due,  endorsed  by 

you,  was  this  day  presented  by  me,  at  the  Cayuga  County  Bank,  where  the  same 

teas  made  payable,  and  payment  thereof  demanded  of  the of 

taid  Bank,  and  by  him  refused,  and  is  this  day  protested  for  non-payment. 
The  holder  looks  to  you  for  the  payment  of  the  same. 

Notary  Pxiblic. 

To  . 


Form  of  Notice  used  in  Vermont. 


A  promissory  note  for  _ dollars,  dated ., 

payable . after  date,  to  ,  signcu 

by  ^— ,  endorsed  by ,  Laving 

been  duly  presented  for  payment  this  day,  and  payment  refused,  has  been  pro- 
'ested  by  me  for  non-payment.  I  noio  hereby  give  you  notice  that  the  holder 
looks  to  you  for  payment,  interest,  cost,  and  damages. 

. Notary  Puili^. 


98  NOTICE    OF    PROTEST. 

FOHM    UStr    BV    THE    NoTARY    OF    THE    SUFFOLK    BaNK,    BoSTCK. 

$ Boston,  ■ __,  185 


Sir,  —  A  promissory   note  for   $   ,  dated  . 

signed ,  ■payable  to  the  order  of_ 


at ,  endorsed  by ,  having  been  protested 

by  me  this  day  for  non-payment,  I  hereby  notifrj  you  that  the  holder  looks  to  you 
for  payment,  interest,  cost  and  dam,ages,  payment  having  been  duly  demanded 
and  refused. 

Done  at  the  request  of  the  Cashier  of  the Bank. 

,  Notary  Public. 


Bill  of  ExcBAiiaE. 

Boston,  ,  185 


A  bill  of  exchange  drawn  by  . 


for dollars,  dated   ,  185  , 

payable after ,  in  favor 

of ,  and  endorsed  by •,  due  this 

day,  ts  protested  for  non-payment,  by  direction  of  the  holder,  payment  having 

been  duly  demanded  and  refused. 

The  holder  requires  of  you  payment  of  Ike  same,  with  interest,  cost  and  darn- 

ages. 

,  Notary  Public. 


REMARKS. 
Judge  Story,  in  his  Treatise  on  Promissory  Notes,  says :  —  The  en 
dorsement  of  a  promissory  note,  in  contemplation  of  law,  amounts  to  a 
contract  on  the  part  of  the  endorser,  with  and  in  favor  of  the  endorsee, 
and  every  subsequent  holder  to  whom  the  note  is  transferred  :  First, 
that  the  instrument  itself  and  the  antecedent  signatures  thereon  are 
genuine.  Second,  that  he,  the  endorser,  has  a  good  title  to  the  instru- 
ment. Third,  that  he  is  competent  to  bind  himself  by  the  endorsement 
as  endorser.  Fourth,  that  the  maker  is  competent  to  bind  himself  to 
the  payment,  and  will,  upon  due  presentment  of  the  note,  pay  it  at  matu- 
rity. Fifth,  That  if,  when  duly  presented,  it  is  not  paid  by  the  maker 
he,  the  endorser,  will  upoit  the  due  and  reasonable  notice  given  to  him  of 
the  dishonor,  pay  the  same  to  the  endorsee  or  holder. 


REMARKS.  99 

There  is  no  particular  form  of  notice  required,  but  it  is  indispensable 
that  it  should,  ei  her  expressly  or  by  just  and  natural  implication,  cou- 
lain  in  substance  the  following  requisites  :  — 

1st.  A  true  description  of  the  note,  so  as  to  ascertain  its  identity. 

2d.  An  assertion  that  it  has  been  duly  presented  to  the  maker  at  its 
maturity,  and  dishonored. 

3d.  That  the  holder  or  other  person  giving  the  notice,  looks  to  the 
person  to  whom  the  notice  is  given,  for  payment  and  indemnity. 

This  statement  is  essential  to  establish  the  claim  or  right  of  the  holdei, 
or  the  party  giving  notice,  for  otherwise  he  will  not  be  entitled  to  any 
payment  from  the  endorser.  It  will  be  sufhcient,  indeed,  if  the  notice 
sent,  necessarily,  or  even  fairly,  implies  by  its  terms  that  there  has  been 
a  due  presentment  and  dishonor  at  the  maturity  of  the  note  ;  but  mere 
uotice  of  the  fact  that  the  note  has  not  been  paid,  affords  no  proof  what- 
ever that  the  note  has  been  presented  in  due  season,  or  even  that  it  has 
been  presented  at  all. 

The  Supreme  Court  of  the  U.  S.  have  decided  that  "where  a  notice 
is  sent,  after  the  exercise  of  due  diligence,  and  inquiry  as  to  the  resi- 
dence of  the  endorser,  a  right  of  action  immediately  accrues  to  the 
holder,  and  subsequent  information  of  another  character  as  to  the  true 
residence  of  the  endorser  does  not  render  it  necessary  for  the  holder  to 
send  him  another  notice. 

The  law  does  not  require  actual  notice.  It  requires  reasonable  dili- 
gence only,  and  reasonable  efforts,  made  in  good  faith,  to  give  it.  And 
if  sufficient  inquiries  have  been  made,  and  information  received,  upon 
which  the  holder  has  a  right  to  rely,  a  mistake  as  to  the  nearest  post 
office  does  not  deprive  him  of  his  remedy.  He  has  done  all  that  the  law 
requires  ;  and  the  notice  thus  sent,  fixes  the  liability  of  the  endorser  as 
effectually  as  if  he  had  actually  received  it. —  {Howard's  Reports,  Vol.  ix.) 


Waiver  of  Notice.  —  In  Maine  it  has  been  decided  thai  if  the  endorser 
of  a  promissory  note  knew  that  the  note  would  not  be  paid  on  present- 
ment, and  that  the  maker  had  deceased,  and  his  estate  insolvent,  such 
knowledge  would  not  relieve  the  holder  from  his  obligation  to  make  the 
presentment  and  give  due  notice  of  dishonor. 

Decease  of  Maker.  —  When  the  maker  of  a  promissory  note  dies  before 
it  becomes  payab  e,  the  holder  should  make  inquiry  for  his  personal 
representative,  if  ;here  be  one,  and  present  the  note  at  maturity  for 
payment. 

By  whom  held.  —  It  has  been  held  that  notice  of  dishonor  need  not 
state  on  whose  behalf  payment  is  applied  for,  nor  where  the  bill  is  lying  ; 
and  a  misdescription  of  the  place  where  the  bill  is  lying  is  immaterial, 
unless  perhaps  a  tender  were  made  there. 


lO'J  REMARKS. 

Kentucky.  —  The  jlace  where  a  bill  of  exchange  is  dated  is,  prima 
facie,  the  residence  of  the  drawer,  and,  in  the  absence  of  proof  to  the 
contrary,  notice  sent  to  that  place  will  be  good. 

In  Massachusetts,  (R.  S.  303,)  all  bills  of  exchange  payable  at  sight, 
tr  at  a  future  day  certain,  and  all  promissory  negotiable  notes  payable 
tt  a  future  day  certain,  within  that  State,  in  which  there  is  no  express 
stipulation  to  the  contrary,  grace  is  allowed  as  it  is  by  the  custom  of 
merchants  on  foreign  bills  of  exchange,  payable  at  a  certain  period  after 
date  or  sight.  These  provisions  do  not  extend  to  any  bill  of  exchange, 
note,  or  draft,  payable  on  demand. 

In  Louisiana,  the  1st  of  January,  the  8th  of  January,  the  22d  of  Feb- 
ruary, the  4th  of  July,  the  25th  of  December,  Sundays  and  Good  Fri- 
day, are  days  of  public  rest.  "When  the  3d  or  both  3d  and  2d  days  of 
grace  on  a  bill  or  note  falls  upon  a  day  of  rest,  such  bill  or  note  shall 
become  due  in  the  one  case  on  the  2d,  and  the  other  on  the  1st  day  of 
grace.  In  computing  the  delay  allowed  in  giving  notice  of  non-pay- 
ment, or  non  acceptance  of  a  bill  or  note,  the  days  of  public  rest  are  not 
counted.     (Bullard  and  Curry's  Digest,  40.) 

In  Michisan,  days  of  grace  are  not  allowed  upon  any  bill,  note,  or 
draft,  payable  on  demand,  but  are  allowed  upon  all  bills  payable  at  sight, 
or  at  a  future  day  certain,  within  the  State,  and  all  negotiable  promis- 
sory notes  and  drafts  payable  at  a  future  day  certain  within  the  State, 
wherein  there  is  no  express  stipulation  to  the  contrary.  (2  R.  S.  of 
1846,  157.) 

In  New  Hampshire,  days  of  grace  are  allowed  on  all  negotiable  prom- 
issory notes,  except  those  payable  on  demand,  unless  the  instrument 
show  the  intention  of  the  parties  to  be  otherwise.     (R.  S.  180.) 

In  Vennont,  bills  and  notes  executed  in  any  other  State,  but  payable 
in  that  State,  and  all  bills  and  notes  executed  in  that  Stale,  and  payable 
in  any  other  State,  are  entitlf^d  to  three  days'  grace  ;  this  does  not  extend 
to  bi..s  and  notes  payable  on  demand,  or  in  any  way  but  in  money. 
(R.  S.  73  ) 


BANKING   AND    FINANCIAL   MAXIMS. 

OPINIONS  ON   COMMERCE,  &c., 

By  Addison— AppUton — Edmund  Burke — Lord  Browjhnm — Buckle 
—Lord  Campbell— W.  H.  Crawford— W.  E.  Channing—P.  W. 
Chandler — ^-1.  J.  Dallas — Delany — The  Edinhnrgli  Recieic — The 
London  Quarterly  Rerieic — Qallatin — A.  Hamilton — A.  B.John- 
son— Dr.  Johnson — Jefferson — Lord  Jeffrey — Chancellor  Kent — 
J.  Stuart  Mill — Madison, — B.  Rush — Smiles — D.  Webster. 


I.  Capital  and  Jjobor. — Rightfully  considered,  no  principle  is  more 
conservative  than  that  which  identifies  the  laborer  with  the  cajntal- 
ist. — Edinburgh  Review,  1864. 

II.  Go-operation. — The  co-operative  principle  is  that  the  workers 
are  the  capitalists.  By  this,  if  it  is  found  practicable,  the  opposition 
between  Capital  and  Labor  is  annihilated. — Edinburgh  Review,  18G4 

III.  The  New  World. — America  and  Australia  are  the  two  fields  in 
which  the  intelligence  and  inventions  of  our  own  age  find  their  widest 
application.  The  ordinary  growth  of  centuries  is  here  compressed 
into  two  or  three  generations  ;  and  the  surface  of  the  earth  submitted 
to  changes  which  have  no  parallel  in  the  earlier  history  of  nations. — 
Edinburgh  Review,  1864. 

IV.  Railroads. — Look  further  at  those  admirable  constructions, 
both  in  Europe  and  America,  by  which  the  railroad  is  carried  across 
mountain  chains,  climbing  tortuously  their  steep  acclivities,  or  forced 
by  tunnels  through  the  rock.  In  the  Cojnapo  Railway  of  Chili,  the 
locomotive  carries  its  train  four  thousand  and  seventy  feet  above  the 
sea.  In  the  several  railroads  which  cross  the  Alleghany  Mountains, 
the  summit  levels  are  from  two  to  three  thousand  feet.  The  new  em- 
pire of  Brazil  boasts  a  work  of  similar  kind,  just  completed.  In  the 
section,  now  open,  of  the  St.  Ander  Railroad  in  Spain,  an  elevation  is 
reached  of  two  thousand  five  hundred  and  twenty-four  feet.  The 
Sommering  Pass,  between  Vienna  and  Gratz,  carries  the  traveller 
three  thousand  feet  above  the  sea.  Tunnels  from  two  to  three  miles 
in  length  are  familiar  to  ns  in  England  and  elsewhere.  That  which 
is  now  in  progress  under  Mount  Cenis  has  for  its  object  and  ambition 
lo  \vin  a  passage  into  Italy  without  crossing  the  Alps    .    .     .    Tlio 


102  BANKING   AND  FINANCIAL  MAXIMS. 

traveller  gains  a  few  hours  of  time  upon  his  journey,  and  emerges 
into  Italy  through  a  hole  in  a  rock! — Edinburgh  Beciew,  1864. 

V.  Human  Progress. — It  is,  in  truth,  a  wonderful  picture  of  human, 
progress — of  progress  continuous,  yet  so  marvellously  quicliened 
during  the  last  fifty  years,  that  the  dullest  observer  of  the  world 
around  him  feels  that  he  is  living  in  a  new  age ;  and  the  most  cau- 
tious philosopher  scarcely  ventures  to  set  a  limit  to  what  may  here- 
after be  attained.  While  the  instincts  and  acts  of  other  animals  have 
remained  stationary  from  the  earliest  recorded  time,  human  intelli- 
gence, working  with,  and  in  part  controlling,  the  great  forces  of  na- 
ture, has  covered  the  globe  with  monuments  of  its  activity  and  power. 
The  whole  may  be  received  as  evidence  of  the  high  destiny  which 
God  has  given  to  man  on  earth  ;  a  destiny  mingled  at  present  with 
much  that  is  obscure  to  reason  and  painful  to  feeling,  but  capable  of, 
and  intended,  as  we  believe,  for  some  higher  and  nobler  development 
in  the  time  yet  to  come. — Edinburgh  Bedew,  1864. 

VI.  Free  Trade. — We  have,  in  great  degree,  confined  ourselves  to 
proving  how  unsound  is  the  social  philosophy  embodied  in  the  Free 
Trade  policy.  It  would  be  even  an  easier  task  to  prove  its  pernicious 
moral  tendencies.  It  is  in  its  very  essence  a  mercenary,  unsocial,  de- 
moralizing system ;  opposed  to  all  generous  actions,  all  kindly  feel- 
ings. Based  on  selfishness — the  most  pervading  as  well  as  most  pow- 
erful of  our  vicious  propensities — it  directs  that  impulse  into  the 
lowest  of  all  channels,  the  mere  sordid  pursuit  of  wealth.  It  teaches 
competition  and  isolation,  instead  of  co-operation  and  brotherhood  ; 
it  substitutes  a  vague  and  impracticable  cosmopolitanism  for  a  lofty 
and  ennobling  patriotism  ;  it  disregards  the  claims  of  humanity  to- 
wards the  poor,  if  opposed  to  the  pecuniary  interests  of  the  rich  ;  it 
takes  no  account  of  all  that  should  exalt  man  in  the  scale  of  being, 
but  elevates  to  exclusive  importance  his  most  degrading  tendencies. 
Wealth  is  its  end  and  aim,  and  mammon  its  divinity.  We  cannot 
altogether  regret  with  Burke  that  "  the  age  of  chivalry  is  past,"  and 
though  we  do  with  him  regret  that  "  an  age  of  sophists,  of  econo- 
mists, and  of  calculators  has  succeeded,"  we  still  trust  that  "  the  glory 
of  England  is  not  yet  extinguished  forever."^ — London  Quarterly  Be- 
vieiD. 

VII.  National  Besources. — The  wealth  of  the  nation,  in  the  value 
and  products  of  its  soil,  in  all  the  acquisitions  of  personal  property, 
and  in  all  the  varieties  of  industry,  remains  almost  untouched  by  the 
hand  of  Government ;  for  the  national  faith,  and  not  the  national 
wealth,  has  hitherto  been  the  principal  instrument  of  finance.  It  was 
reasonable,  however,  to  expect  that  a  period  must  occur,  in  the  course 
of  a  protracted  war,  when  confidence  in  the  accumulating  public  en- 
gagements could  only  be  secured  by  an  active  demonstration  both  of 


BANKINa  AI^D  FINANCIAL  MAXIMS  103 

the  capacity  and  the  disposition  to  perform  them.  In  the  present 
Btato  of  tlie  Treasury,  tlierefori',  it  is  a  just  consolation  to  reflect  that 
a  prompt  and  nssolute  application  of  the  resources  of  the  country  will 
eflfectually  relieve  from  every  pecuniary  embarrassment,  and  vindi- 
cate the  fiscal  honor  of  the  (Joveruinent. — A.  J.  Dallas,  Secretary  of 
the  Treasury,  1814. 

VIII.  National  Debts. — It  is  a  wise  rule,  and  should  be  fundamen- 
tal in  a  government  disposed  to  cherish  its  credit,  and  at  the  same 
time  to  restrain  tbe  use  of  it  within  the  limits  of  its  faculties,  never 
to  borrow  a  dollar  without  layin":  a  tax  in  the  same  instant,  for  pay- 
ing the  interest  annually  and  the  principal  within  a  given  term ;  and 
to  consider  that  tax  as  pledged  to  the  creditors  on  the  jniblic  faith. 
On  such  a  pledge  as  this,  sacredly  observed,  a  government  may  al- 
ways command,  on  a  reasonable  interest,  all  the  lendable  money  of 
its  citizens ;  whilst  the  necessity  of  an  equivalent  tax  is  a  salutary 
warning  to  them  and  their  constituents  against  oppression,  bank- 
ruptcy, and  its  inevitable  consequence,  revolution. — Thomas  Jeffei'son. 

IX.  Origin  of  Rej)udiation. — In  proportion  precisely  as  an  individ- 
ual is  beyond  the  reach  of  compulsory  process,  should  he  be  inclined 
to  disregard  the  technicalities  of  mere  law,  and  base  himself  upon 
the  broader  principles  of  natural  justice.  This  is  still  more  necessarv 
when  an  independent  sovereignty  is  concerned ;  because  it  is  moie 
diflScult  to  procure  redress  for  wrongs  committed  by  a  State.  The 
relation  between  debtor  and  creditor,  in  all  cases  invohing  the  re- 
pose of  confidence,  is  pre-eminently  a  fiduciary  relation  when  the 
debtor  is  a  sovereign  commonwealth.  It  should  be  distinguished  by 
that  uberrima  fides  which  scorns  the  strict  letter  of  the  contract  and 
regards  its  spirit  and  intention. — Peleg  W-  Chandler. 

X.  Poicer  of  Taxation. — Congress  has  the  power  to  lay  stamp  du- 
ties on  notes,  on  bank  notes,  and  on  any  description  of  bank  notes. 
That  power  has  already  been  exercised,  and  the  duties  may  be  laid 
on  to  such  an  amount,  and  in  such  a  manner,  as  may  be  necessary  to 
effect  the  object  intended.  This  object  is  not  merely  to  provide  gen- 
erally for  the  general  welfare,  but  to  carry  into  effect,  in  conformity 
with  the  last  paragraph  of  the  eighth  section  of  the  first  article,  those 
several  and  express  provisions  of  the  Constitution,  which  vest  in  Con- 
gress exclusively  the  control  over  the  monetary  system  of  the  United 
States,  and  more  particularly  those  which  imply  the  necessity  of  a 
uniform  currency. — A.  Gallatin. 

XI.  7>/.w«?V>??.— The  apportionment  of  taxes  on  the  various  descrip- 
tions of  property  is  an  act  which  seems  to  require  the  most  exact  im- 
partiality ;  yet  there  is,  perhaps,  no  legislative  act  in  which  greater 
opportunity  and  temptation  are  given  to  a  predominant  party  to  tram- 


104  BANKING   AND  FINANCIAL  MAXIMS 

pie  on  the  rules  of  justice.  Every  sMlling  with  which  they  overbur- 
den the  inferior  number,  is  a  shilling  saved  to  their  own  pockets. — 
Madison  {Federalist),  JVocember  23,  1787. 

XII.  Public  Credit. — Credit,  public  and  private,  is  of  the  greatest 
consequence  to  every  country;  of  this,  it  might  be  emphatically 
called  the  invigorating  principle.  No  well-informed  man  can  cast  a 
retrospective  eye  over  the  progress  of  the  United  States,  from  their 
infancy  to  the  present  period,  without  being  convinced  that  they  owe, 
in  a  great  degree,  to  the  fostering  influence  of  credit,  their  present 
mature  growth.  This  credit  has  been  of  a  mixed  nature,  mercantile 
and  public,  foreign  and  domestic.  Credit  abroad  was  the  trunk  of 
our  mercantile  credit,  from  which  issued  ramifications  that  nourished 
all  the  parts  of  domestic  labor  and  industry.  The  bills  of  credit  emit- 
ted from  time  to  time  by  the  different  local  gorernments,  which 
passed  current  as  money,  co-operated  with  that  resource. — Alexander 
Hamilton. 

XIII.  The  Public  Debt. — There  can  be  no  more  sacred  obligation, 
then,  on  the  public  agents  of  a  nation,  than  to  guard  with  provident 
foresight  and  inflexible  perseverance  against  so  mischievous  a  result 
[the  accumulation  of  public  debt].  True  patriotism  and  genuine  pol- 
icy cannot,  it  is  respectfully  presumed,  be  better  demonstrated  by 
those  of  the  United  States,  at  the  present  juncture,  than  by  improving 
eSicaciously  the  very  favorable  situation  in  which  they  stand  for  ex- 
tinguishing, with  reasonable  celerity,  the  actual  debt  of  the  country, 
and  for  laying  the  foundation  of  a  system  which  may  shield  posterity 
from  the  consequences  of  the  usual  impro\idence  and  selfishness  of 
its  ancestors ;  and  which,  if  possible,  may  give  immortality  to  public 
credit. — Alexander  Hamilton,  Secretary  of  the  Treasury,  1795. 

XrV.  A  Warning. — By  a  series  of  arbitrary  acts  on  the  part  of  gov- 
ernment, and  by  connecting  some  splendid  and  illusory  schemes  with 
the  bank.  Law  succeeded  in  putting  in  circulation  about  four  hun- 
dred and  twenty  millions  of  dollars  in  bank  notes,  or  more  than  t^vice 
the  amount  of  the  currency  then  wanted  in  France.  This  paper  was 
made  a  legal  tender,  to  the  total  exclusion  of  the  precious  metals. 
But  the  laws  and  all  the  power  of  the  French  government  were  un- 
equal to  the  task  of  sustaining  that  excess  of  currency.  The  price  of 
every  species  of  merchandise  naturally  rose  100  per  cent.  Govern- 
ment, with  a  view  probably  to  prevent  a  final  catastrophe,  reduced, 
by  a  decree,  the  notes  to  one-half  their  original  value. — A.  Gallatin. 

XV.  Statistics. — To  those  who  have  a  steady  conception  of  the  reg- 
ularity of  events,  and  have  firmly  seized  the  great  truth  that  the  ac- 
tions of  men,  being  guided  by  their  antecedents,  are  in  reality  never 
inconsistent ;  but,  however  capricious  they  may  appear,  only  form 


BANKINQ  AND  FINANCIAL  MAXIMS.  105 

part  of  one  vast  scheme  of  universal  order,  of  which  we,  in  the  pre- 
sent state  of  knowledge,  can  barely  see  the  outline — to  those  who  un- 
derstand tliis,  which  ia  at  once  the  key  and  the  basis  of  history,  the 
facts  just  adduced,  so  far  from  being  strange,  will  be  precisely  what 
would  have  been  expected,  and  ought  long  since  to  have  been  known. 
.  .  .  Statistics  have  already  thrown  more  light  on  the  study  of 
human  nature  than  all  the  sciences  put  together. — Buckle. 

XVI.  Mineral  Wealth. — Great  Britain  is  indebted  to  its  mines  for 
its  colonization  in  the  mists  of  time — for  much  of  its  present  import- 
ance— and,  according  to  Bochart  and  others,  even  for  its  name.  Its 
whole  history,  indeed,  is  associated  with  these  subterranean  treasures. 
The  most  ancient  nations  of  the  East  resorted  to  it  for  tin  and  copper. 
Julius  Ciiesar,  like  the  Si)anisli  conquerors  of  the  West,  was  attracted 
to  its  shores  cliiefly  by  rumors  of  its  mineral  wealth  ;  and  Pliny,  and 
even  the  severer  Tacitus,  invested  Britain  with  the  splendors  of  an 
El  Dorado.  These  golden  visions,  to  be  sure,  were  not  realized.  But 
the  Romans  worked  extensively  its  mines  of  lead,  and  extracted  sil- 
ver from  the  produce.  It  was  reserved  for  much  later  times  to  dis- 
cover that  the  stratification  of  Britain  was  of  almost  unequalled  vari- 
ety, and  that  it  contained,  to  an  extent  never  dreamed  of,  the  most 
abundant  supplies  of  coal  and  iron.  The  manufacturing  industry  of 
the  north  originated  in  and  was  long  satisfied  with,  the  power  derived 
from  the  uncertain  streams  issuing  from  its  mountains.  But  tlie 
steam-engine  at  last  opened  out  visions  of  national  wealth  more  goi^ 
geous  than  the  mines  of  Peru.  It  not  only  enabled  the  deeper  metal- 
lic and  other  mines  to  be  worked,  and  thus  added  new  realms  of 
happy  conquest  to  the  nation,  but  it  formed  in  itself  a  matchless 
Xxjwer  for  all  the  industrial  arts  of  life.  All  that  this  many-handed 
and  munificent  giant  demanded  for  its  unceasing  labors,  was  a  suffi- 
cient supply  of  its  peculiar  food ;  and,  fortunately  for  Britain,  this 
food  was  found  within  her  shores  in  a  profusion  and  of  an  excellence 
unparalleled  in  Europe. — Edinburgh  Reciew. 

XVII.  TJie  Standard. — There  is  not,  however,  in  nature,  any  per- 
fect or  altogether  permanent  standard  of  value.  There  is  not  a  single 
commodity,  the  relative  value  of  which,  as  compared  to  that  of  all 
other  commodities,  is  not  subject  to  great  and  permanent  changes,  as 
well  as  to  temporary  fluctuations.  But  it  will  be  found  that  the  na- 
ture of  the  demand  for  precious  metals,  the  comparative  regularity 
of  the  supply,  and  especially  their  much  greater  durability  and  in- 
trinsic value  than  those  of  any  other  substance  otherwise  fitted  for  a 
circulating  medium,  restrain  the  fluctuations  to  which  the  relative 
value  is  liable,  within  far  narrower  limits,  than  is  the  case  with  any 
other  commodity,  which  might  have  been  selected  for  a  currency.— 
A.  Oallatm. 


lOG  BANKING  AND  FINANCIAL  MAXIMS. 

XVIII.  Railroads  and  Steam. — Among  the  innumerablo  benefits 
derived  from  advancing  knowledge,  there  are  few  more  important 
than  those  improved  facilities  of  communication  which,  by  increasino- 
the  frequency  with  which  nations  and  individuals  are  brought  into 
contact,  have,  to  an  extraordinary  extent,  corrected  their  prejudices, 
raised  the  opinion  which  each  forms  of  the  other,  diminished  their 
mutual  hostility,  and  thus  diffusing  a  more  favorable  view  of  our 
common  nature,  have  stimulated  us  to  develop  those  boundless  re- 
sources of  the  human  understanding,  the  very  existence  of  which  it 
was  once  considered  almost  a  heresy  to  assert. — Buckle. 

XIX.  Steam. — It  has  increased  indefinitely  the  mass  of  human 
comforts  and  enjoyments ;  and  rendered  cheap  and  accessible,  all  over 
the  world,  the  materials  of  wealth  and  prosperity.  It  has  armed  the 
feeble  hand  of  man,  in  short,  with  a  power  to  which  no  limits  can  be 
assigned ;  completed  the  dominion  of  mind  over  the  most  refractory 
qualities  of  matter ;  and  laid  a  sure  foundation  for  all  those  future 
miracles  of  mechanic  power  wliich  are  to  aid  and  reward  the  labors 
of  after  generations.  It  is  to  the  genius  of  one  man,  too,  that  all  this 
is  mainly  owing.  And  certainly  no  man  ever  bestowed  such  a  gift 
on  his  kind.  The  blessing  is  not  only  universal,  but  unbounded; 
and  the  fabled  inventors  of  the  jjlough  and  the  loom,  who  were  dei- 
fied by  the  erring  gratitude  of  their  rude  contemporaries,  conferred 
less  important  benefits  on  mankind  than  the  inventor  of  our  present 
steam-engine. — Francis  Jeffrey,  1819. 

XX.  Mechanical  Progress. — Machinery  is  made  to  perform  what 
has  formerly  been  the  toil  of  human  hands,  to  an  extent  that  aston- 
ishes the  most  sanguine ;  with  a  degree  of  power  to  wMch  no  nirni- 
ber  of  human  arms  is  equal,  and  with  such  precision  and  exactness 
as  almost  to  suggest  the  notion  of  reason  and  intelligence  in  the  ma- 
chines themselves.  Every  natural  agent  is  put  unrelentingly  to  the 
■wheel.  The  winds  work,  the  waters  work,  the  elasticity  of  the  met- 
als works  ;  gravity  is  solicited  into  a  thousand  new  forms  of  action  ; 
levers  are  multiplied  upon  levers ;  wheels  revolve  upon  the  periphe- 
rics of  other  wheels.  The  saw  and  the  plane  are  tortured  into  an  ac- 
commodation to  new  uses ;  and,  last  of  all,  with  inimitable  power, 

&nA"iDith  wTiirhrind  sound,"  comes  the  potent  agency  of  steam. 

Daniel  Webster,  1828. 

XXI.  Facts.— Facts  are  to  the  mind  the  same  thing  as  food  to  the 
body.  On  the  due  digestion  of  facts  depends  the  strength  and  wis- 
dom of  the  one,  just  as  vigor  and  health  depend  on  the  other.  The 
wisest  in  council,  the  ablest  in  debate,  the  most  agreeable  companion 
in  the  commerce  of  human  life,  is  that  man  who  has  assimilated  to 
liis  understanding  the  greatest  number  of  facts. — Burke. 


BANKING  AND  FINANCLVL  MAXIMS.  l07 

XXII.  Commerce. — An  unrestrained  intercourse  between  tlie  States 
themselves  will  advance  the  trade  of  each,  by  an  interchange  of  their 
resi)ective  productions,  not  only  for  the  supply  of  reciprocal  wants  at 
home,  but  for  the  exportation  to  foreign  markets.  The  veins  of  com- 
merce in  every  part  will  be  replenished,  and  will  acquire  additional 
motion  and  vigor,  from  a  free  circulation  of  the  commodities  of  every 
part.  Commercial  enterprise  will  have  much  greater  scope  from  the 
diversity  in  the  productions  of  different  States.  When  the  staple  of 
one  fails,  from  a  bad  harvest  or  unproductive  crop,  it  can  call 
to  its  aid  tbe  staple  of  another.  The  variety,  not  less  than  the  value 
of  products  for  exportation,  contributes  to  the  activity  of  foreign  com- 
merce.— Hamilton,  Federalist. 

XXIII.  Board  of  Directors. — Regard  to  reputation  has  a  less  active 
influence,  wLen  the  infamy  of  a  bad  action  is  to  be  divided  among  a 
number,  than  when  it  is  to  fall  singly  upon  one.  A  spirit  of  faction, 
■which  is  apt  to  mingle  its  poison  in  the  deliberations  of  all  bodies  of 
men,  will  often  hurry  the  persons  of  whom  they  are  composed  into 
improprieties  and  excesses,  for  which  they  would  blush  in  a  private 
capacity. — Hamilton,  Federalist,  Decemher,  1787. 

XXIV.  Opportunities. — They  who  have  turned  their  attention  to 
the  affairs  of  men,  must  have  perceived  that  there  are  tides  in  them  ; 
tides  very  regular  iu  their  duration,  strength,  and  direction,  and  sel- 
dom found  to  run  twice  exactly  in  the  same  manner  or  measure.  To 
discern  and  to  profit  by  these  tides  in  national  affiiirs,  is  the  business 
of  those  who  preside  over  them ;  and  they  who  have  had  much  ex- 
perience on  this  head  inform  us,  that  there  frequently  are  occasions 
when  days,  nay,  even  when  hours,  are  precious. — Hamilton,  Federal- 
ist, March  7,  1788. 

XXV.  The  revenue  of  the  State  is  the  State  ;  in  effect,  all  de- 
pends upon  it,  whether  for  support  or  for  reformation. — Burke. 

XXVI.  Protection. — The  merchant,  like  the  manufacturer,  requires, 
at  proper  junctures,  the  helping  hand  of  Congress,  and  may  suffer 
without  it.  Hence  it  has  been  the  object,  as  it  was  the  duty,  of  the 
Department,  to  invoke  legislative  favor  for  both  these  great  interests, 
under  the  belief  that  they  flourish  most  when  they  flourish  together ; 
that,  in  proportion  as  both  flourish,  in  conjunction  with  agriculture 
(the  invariable  feeder  of  both),  is  the  public  treasury  most  likely  to 
be  kept  full ;  and  that  all  plans  of  finance  that  do  not  take  the  co-op- 
erating prosperity  of  these  three  primary  interests  of  the  State  as 
their  foundation,  must  prove  fallacious  or  short  lived. — Richard  Hush, 
Secretary  of  the  Treasury,  1828. 

XXVII.  Public  Faith.  -Every  breach  of  the  public  engagements, 


108  BANKING  AND  FINANCIAL  MAXIMS. 

■whetlicr  from  clioice  or  necessity,  is,  in  different  def^recs,  hurtful  to 
public  credit.  When  such  a  necessity  does  truly  exist,  the  evils  of  it 
are  only  to  be  palliated  by  scrupulous  attention,  on  the  part  of  tho 
Government,  to  carry  the  violation  no  further  than  the  necessity  ab- 
solutely requires  ;  and  to  manifest,  if  the  nature  of  the  case  admit  of 
it,  a  sincere  disposition  to  make  reparation  whenever  circumstances 
shall  permit.  But,  with  every  possible  mitigation,  credit  must  suffer, 
and  numerous  mischiefs  ensue.  It  is,  therefore,  liighly  important, 
when  an  appearance  of  necessity  seems  to  press  upon  the  public  coun- 
cils, that  they  should  examine  well  its  reality,  and  be  perfectly  as- 
sured that  there  is  no  method  of  escaping  from  it,  before  they  yield 
to  its  suggestions. — Alexander  Hamilton,  Secretary  of  the  Treasury, 
1790. 

XXVIII.  The  Future  of  the  United  States. — There  will  be  no  more 
oppression,  either  of  conscience  or  any  other  species ;  no  oppression 
of  one  class  by  another,  or  of  all  classes  of  society  by  a  permanent 
army.  North  America  will  only  have  an  army  for  appearance  sake ; 
consisting,  at  most,  of  twelve  thousand  men,  disseminated  in  little 
bands  over  the  entire  extent  of  her  territory.  Then,  there  will  be  no 
unpleasant  traces  of  the  past ;  no  law  of  prhnogeniture  ;  no  exclusive 
academies ;  no  embroidery  of  distinctive  rank ;  no  crosses  and  deco- 
rations; no  cringing  courtiers;  no  sinecure  offices;  no  charity  under 
the  name  of  reward.  Men  will  be  estimated  at  their  real  value ; 
nothing  will  be  resi:)ected  save  work  and  money — the  incarnation  of 
labor — but  it  will  have  to  be  earned  by  the  sweat  of  one's  brow,  for 
the  dolee  far  nieiite  will  be  looked  upon,  in  America,  as  a  robbery 
conmiitted  upon  society  in  general. — Address  to  King  Cotton. 

XXIX.  The  American  Gold  Rcgio7i.— The  ^eat  auriferous  region 
of  the  United  States,  in  the  westei'u  portion  of  the  continent,  stretches 
from  the  49th  degree  of  north  latitude  and  Puget  Sound,  to  the  80° 
30'  parallel,  and  from  the  102d  degree  of  longitude  v;est  of  Greenwich, 
to  the  Pacific  Ocean  ;  embracing  portions  of  Dacotah,  Nebraska,  Col- 
orado, all  of  New  Mexico,  with  Arizona,  Utah,  Nevada,  California, 
Oregon,  and  Washington  Territories.  It  may  be  designated  as  com- 
prising seventeen  degrees  of  latitude,  or  a  breadth  of  eleven  hundred 
miles,  from  north  to  south,  and  of  nearly  equal  longitudinal  exten- 
sion ;  making  an  area  of  more  than  a  million  of  square  miles. — An^ 
nual  Report  of  the  Commissioner  of  the  Land  Office. 

XXX.  Public  Debt. — Persuaded,  as  the  Secretary  is,  that  the  proper 
funding  of  the  present  debt  will  render  it  a  national  blessing,  yet  he 
is  so  far  from  acceding  to  the  position,  in  the  latitude  in  which  it  ia 
sometimes  laid  dov/n,  that  "  public  debts  are  public  benefits  " — a  po- 
sition inviting  to  prodigality,  and  liable  to  dangerous  abuse— that  ho 


BANKING   AND  FINANCIAL  MAXIMS.  109 

ardently  \%ishes  to  see  it  incorporated  as  a  fundamental  maxim,  in 
the  system  of  public  credit  of  tlie  L'uited  States,  that  tbe  creation  of 
debt  should  always  be  accomi)anied  with  the  means  of  extinguish- 
ment. This  he  regards  as  the  true  secret  for  rendering  public  credit 
immortal.  And  he  presumes  that  it  is  difficult  to  conceive  a  situation 
in  which  there  may  not  be  an  adherence  to  the  maxim. — Alexander 
Hamilton,  Secretary  Treasury,  1790. 

XXXI.  No  expectation  of  forbearance  or  indulgence  should  be  en- 
couraged. Favor  and  benevolence  are  not  the  attributes  of  good 
banking.  Strict  justice  and  the  rigid  performance  of  contracts  are 
its  proper  foundation. — Appleton. 

XXXII.  Specie  and  Paper. — The  essential  difference  between  bank- 
ing and  other  commercial  business  is,  that  merchants  rely,  for  the 
fulfilment  of  their  engagements,  on  their  resources,  and  not  on  the 
forbearance  of  their  creditors ;  while  the  banks  always  rely,  not  only 
on  their  resources,  but  also  on  the  probability  that  their  creditors  will 
not  require  pa}-ment  of  their  demands.  We  have  already  seen  that 
this  probability  is  always  increased  or  lessened  in  proportion  as  the 
issues  of  the  banks  are  moderate  or  excessive.  One  of  the  most  eSi- 
cicnt  modes  to  reduce  the  amount  of  bank  notes,  as  compared  to  the 
total  amount  of  the  currency  of  the  cotmtry,  consists  in  the  increase 
of  the  metallic  currency  which  circulates  amongst  the  people,  inde- 
pendent of  that  which  is  kept  in  reserve  in  the  vaults  of  the  banks. — 
Albert  Gallatin. 

XXXIII.  Requisites  of  Bankers. — A  banker  should  possess  a  eufli- 
ciency  of  legal  knowledge  to  make  him  suspect  what  may  be  defects 
in  proffered  securities,  so  as  to  submit  his  doubts  to  authorized  coun- 
sellors. He  must,  in  all  things,  be  eminently  practical.  Every  man 
can  tell  an  obviously  sufficient  security  and  an  obviously  abundant 
security,  but  neither  of  these  constitute  any  large  portion  of  the  loans 
that  are  offered  to  a  banker.  Security  practically  sufficient  for  the 
occasion  is  all  that  a  banker  can  obtain  for  the  greater  number  of 
loans  he  must  make.  If  he  must  err  in  his  judgment  of  securities, 
he  bad  better  reject  fifty  good  loans  than  make  one  bad  debt ;  but 
be  must  endeavor  not  to  err  on  the  extreme  of  caution  or  the  extreme 
of  temerity ;  and  his  tact  in  these  particulars  will,  more  than  any 
other,  constitute  the  criterion  of  his  merits  as  a  banker. — A.  B. 
Johnson. 

XXXrV.  Directors. — Directors  are,  nrtute  officii,  something  more 
than  irresponsible  dummies.  They  are  not,  it  is  true,  strictly  trus- 
tees, in  every  sense  of  the  word  ;  they  are  not,  for  all  purposes,  like 
persons  in  whom  property  is  vested  upon  specific  trusts  ;  but  they  fill 
what  the  law  calls  a  fiduciary  character.    They  arc  at  all  times,  in 


110  BANKING  AND  FINANCIAL  MAXIMS. 

the  nature  of  trustees,  partaking  of  tlicir  liabilities  and  participating 
in  their  immunities ;  and  they  are,  as  to  the  application  of  funds  be- 
longing to  the  comi^any  which  come  into  their  hands,  or  which  are 
dealt  with  by  their  orders,  in  general,  strictly  trustees. 

XXXV.  Specie  Payments. — It  is,  then,  believed  that  the  evils  which 
are  felt  in  those  sections  of  the  Union  where  the  distress  is  most  gen- 
eral, will  not  be  extensively  relieved  by  the  establishment  of  a  na- 
tional currency.  The  sufferings  which  have  been  produced  by  the 
efforts  that  have  been  made  to  resume  and  to  continue  specie  pay- 
ments have  been  great.  They  are  not  terminated,  and  must  continue 
until  the  value  of  property  and  the  price  of  labor  shall  assume  that 
relation  to  the  f»recious  metals  which  our  wealth  and  industry,  com- 
pared with  those  of  other  States,  shall  enable  us  to  retain.  Until 
this  shall  be  effected,  an  abortive  attempt,  by  the  substitutioii  of  a 
paper  currency,  to  arrest  the  evils  we  are  suffering,  will  produce  the 
most  distressing  consequences.— TF?/i.  U.  Crawford,  Secretary  of  the 
Treasury,  Feb.,  1820. 

XXXVI.  Bank  Loans. — If  banks  were  established  only  in  the  prin- 
cipal commercial  cities  of  each  State ;  if  they  were  restrained  from 
the  issue  of  notes  of  small  denominations ;  if  they  should  retain  an 
absolute  control  over  one-half  of  their  capital  and  the  whole  of  the 
credit  which  they  employ,  by  discounting  to  that  amount  nothing 
but  transaction  paper,  payable  at  short  dates,  the  credit  and  stability 
of  the  banks  would  at  least  be  unquestionable.  Their  notes  could 
always  be  redeemed  in  specie  on  demand.  The  remaining  part  of  their 
capital  might  be  advanced  upon  long  credits  to  manufacturers,  and 
even  to  agriculturists,  without  the  danger  of  being  under  the  neces- 
sity of  calling  upon  such  debtors  to  contribute  to  their  relief,  if  emer- 
gencies should  occur. —  Wm.  H.  Crawford,  Secretary  Treasury,  1820. 

XXXVII.  Money  Saving.— The  saving  of  money,  for  the  mere  sake 
of  it,  is  but  a  mean  thiug,  even  though  earned  by  honest  work  ;  but 
where  earned  by  dice-throwing,  or  speculation,  and  without  labor,  it 
Is  still  worse.  To  provide  for  others,  and  for  our  own  comfort  and 
independence  in  old  age,  is  honorable  and  greatly  to  be  commended  ; 
but  to  hoard  for  mere  wealth's  sake,  is  the  characteristic  of  the  nar- 
row-souled  and  the  miserly.  It  is  against  the  growth  of  this  habit 
of  inordinate  saving,  that  the  wise  man  needs  most  carefully  to  guard 
himself;  else  what  in  youth  was  simple  economy,  may,  in  old  age, 
grow  into  avarice;  and  what  was  a  duty  in  the  one,  may  become  a 
vice  in  the  other.—"  Self-Hclp,"  by  Smiles. 

XXXVIII.  Money. — The  power  of  money  is,  on  the  whole,  over- 
estimated. The  greatest  things  which  have  been  done  for  the  world 
have  not  been  accomplished  by  rich  men,  or  by  subscription  lists ; 


BANKING  AND  FINANCIAL  MAXIMS.  HI 

but  by  men  generally  of  small  means.  Christianity  was  propagated 
over  half  the  world  by  men  of  the  poorest  class;  aud  the  greatest 
thinkers,  discoverers,  inventors,  and  artists,  have  been  men  of  mode- 
rate wealth— many  of  them  little  raised  above  the  condition  of  man- 
ual laborers— in  point  of  worldly  circumstances.  And  it  will  always 
be  so.  Riches  are  ofteuer  an  impediment  than  a  stimulus  to  action  ; 
and,  in  many  cases,  they  are  quite  as  much  a  misfortune  as  a  bless- 
ing.— "  Sdf-Udp,"  by  SmUcn. 

XXXIX.  Money. — Money  is,  with  propriety,  considered  as  the  vital 
principle  of  the  body  politic ;  as  that  which  sustains  its  life  and  mo- 
tion, and  enables  it  to  perform  its  most  essential  functions.  A  com- 
I)lete  power,  therefore,  to  procure  a  regular  and  adequate  supply  of  it, 
as  far  as  the  resources  of  tlie  community  will  permit,  may  be  regarded 
as  an  indispensable  ingredient  in  every  Constitution.  From  a  defi- 
ciency in  this  particular,  one  of  two  evils  must  ensue  ;  either  the  peo- 
ple must  be  subjected  to  continual  plunder,  as  a  substitute  for  a  more 
eligible  mode  of  supplying  the  public  wants,  or  the  Government  must 
sink  into  a  fatal  atrophy,  and,  in  a  short  course  of  time,  perish. — 
Hamilton,  Federalist,  December  28,  1787. 

XL.  Social  Advance^nent. — The  multitude  is  rising  from  the  dust. 
Once  we  heard  of  the  few,  now  of  the  many ;  once,  of  the  pre- 
rogatives of  a  part,  now  of  the  rights  of  all.  We  are  looking,  as 
never  before,  through  the  disguises,  envelopments,  of  ranks  and 
classes,  to  the  common  nature  wliich  is  below  them  ;  and  are  begin- 
ning to  learn  that  every  being  who  partakes  of  it,  has  noble  powers 
to  cultivate,  solemn  duties  to  perform,  inalienable  rights  to  assert,  a 
vast  destiny  to  accomplish.  The  grand  idea  of  humanity,  of  the  im- 
portance of  man  as  man,  is  spreading  silently,  but  surely. —  W.  E. 
Channing. 

XLI.  Statistics. — Whoever  is  at  all  acquainted  with  what  has  been 
done  during  the  last  two  centuries,  must  be  aware  that  every  gene- 
ration demonstrates  some  events  to  be  regular  and  predictable  which 
the  preceding  generation  had  declared  to  be  irregular  and  unpredict- 
.  able ;  so  that  the  marked  tendency  of  advancing  civilization  is  to 
strengthen  our  belief  in  the  universality  of  order,  of  method,  and  of 
law.  ...  It  becomes,  therefore,  in  the  highest  degree,  important 
to  ascertain  whether  or  not  there  exists  a  regularity  in  the  entire 
moral  conduct  of  a  given  society ;  and  this  is  precisely  one  of  those 
questions  for  the  decision  of  which  statistics  supply  us  with  materials 
of  immense  \&\mq.— Buckle,  History  of  Civilization. 

XLII.  Paper  Money. — The  loss  which  America  has  sustained  since 
the  peace,  from  the  pestilent  effects  of  paper  money  on  the  necessary 
confidence  between  man  and  man,  on  the  necessary  confidence  in  the 


112  BANKING  AND  FIN.\NCIAL  MAXIMS. 

public  councils,  on  tlie  industry  and  morals  of  the  people,  and  on  the 
character  of  republican  Government,  constitutes  an  enormous  debt 
against  the  States  chargeable  with  this  unadvised  measure,  which 
must  long  remain  unsatisfied ;  or  rather  an  accumulation  of  guilt, 
■which  can  be  expiated  no  otherwise  than  by  a  voluntary  sacrifice  on 
the  altar  of  justice  of  the  power  which  has  been  the  instrument  of  it. 
— Madison,  Federalist,  January  25,  1788. 

XLIII.  Powers  and  Duties  of  Agents. — An  agent  who  is  entrusted 
with  general  powers  must  exercise  a  sound  discretion,  and  he  has  all 
the  implied  powers  which  are  witliin  the  scope  of  the  employment. 
A  power  to  settle  an  account,  implies  the  right  to  allow  payments 
already  made.  If  his  powers  are  special  and  limited,  he  must  strictly 
follow  them  ;  but  whether  the  authority  be  special  or  general,  each 
case  includes  the  usual  and  appropriate  means  to  accomplish  the  end. 
An  agent  cannot  be  both  buyer  and  seller,  for  this  would  expose  his 
fiduciary  trust  to  abuse  and  fraud. — Kent's  Commentaries. 

XLIV.  Literary  Pursuits  of  Merchants. — Biography  abounds,  in 
truth,  with  examples  of  the  union  of  the  prusuits  of  literature  and 
science  with  those  of  every  department  of  active  life.  The  most  ele- 
gant of  the  writers  of  ancient  Rome  was  also  the  most  renowned  of 
her  warriors.  It  was  amid  the  hurry  and  toils  of  his  campaigns  that 
Julius  Caesar  is  said  to  have  written  those  Commentaries,  or  memoirs 
of  his  military  exploits,  which  have  immoi'talized  his  name  more 
than  all  his  victories,  and  thus  amply  justified  the  anxiety  he  is  re- 
corded to  have  shown  to  preserve  the  work  when,  being  obliged  to 
throw  liimself  from  his  ship,  in  the  bay  of  Alexandria,  and  swim  for 
his  life,  he  made  his  way  to  the  shore,  with  his  arms  in  one  hand, 
holding  his  Commentaries  with  his  teeth. — Lord  Brougham. 

XLV.  Merchants. — I  am  wonderfully  delighted  to  see  a  body  of 
men  thriving  in  their  own  fortunes,  and  at  the  same  time  promoting 
the  public  stock ;  or,  in  other  words,  raising  estates  for  their  own 
families,  by  bringing  into  their  coimtry  whatever  is  wanting,  and 
carrying  out  of  it  whatever  is  superfluous.  Nature  seems  to  have 
taken  a  particular  care  to  disseminate  her  blessings  among  the  diiferent 
regions  of  the  world  with  an  eye  to  their  mutual  intercourse  and 
traffic  among  mankind,  that  the  nations  of  the  several  parts  of  the 
globe  might  have  a  kind  of  dependence  upon  one  another,  and  be 
united  together  by  their  common  interest. — Addison. 

XL VI.  Merchants. — There  are  not  more  useful  members  in  a  Com- 
monwealth than  merchants.  They  knit  mankind  together  in  a  mu- 
tual intercourse  of  good  offices ;  distribute  the  gifts  of  nature ;  find 
■work  for  the  jjoor,  and  wealth  for  the  rich  ;  and  magnificence  for  the 
great.    .     ,     .    Trade,  without  enlarging  the  British  territories,  has 


BANKING  AND  FINANCIAL  MAXIMS.  113 

given  lis  a  kind  of  additional  empire  ;  it  has  multiplied  the  number 
of  till!  rich  ;  made  our  landcMl  estates  infinitely  more  valuable  than 
they  were  formerly  ;  and  added  to  them  an  accession  of  other  estates 
as  valuable  as  the  estates  themselves. — Addition. 

XLVII.  Frugality. — It  appears  evident  that  frugality  is  necessary 
even  to  complete  the  pleasure  of  expense  ;  for  it  may  be  generally  re- 
marked of  those  who  squander  what  tliey  know  their  fortune  not 
sufficient  to  allow,  that,  in  their  most  jovial  expense,  there  always 
breaks  out  some  proof  of  impatience  and  discontent ;  they  either  scat- 
ter with  a  kind  of  wild  desperation  and  affected  lavishness,  as  crimi- 
nals brave  the  gallows  when  they  cannot  escape  it,  or  pay  their 
money  with  a  peevish  anxiety,  and  endeavor  at  once  to  epend  idly, 
and  to  save  meanly  ;  having  neither  firmness  to  deny  tlieir  passions 
nor  courage  to  gratify  them,  they  munnur  at  their  own  enjoyments, 
and  poison  the  bowl  of  pleasure  by  reflection  on  the  cost. — Johnson. 

XLVIII.  Circumspection. — Men  with  a  multiplicity  of  transactions 
pressing  on  them,  and  moving  in  a  narrow  circle,  and  meeting  each 
other  daily,  desire  to  write  little,  and  leave  unwritten  what  they  take 
for  granted  in  every  contract.  In  spite  of  the  lamentations  of  judges 
they  will  continue  to  do  so ;  and,  in  a  vast  majority  of  cases,  of  which 
courts  of  law  hear  nothing,  they  do  so  without  loss  or  inconvenience  ; 
and,  upon  the  whole,  they  find  this  mode  of  dealing  advantageous, 
even  at  the  risk  of  occasional  litigation. — Lord  Campbell. 

XLIX.  Payment  of  Debts. — Paying  of  debt  is,  next  to  the  grace  of 
God,  the  best  means  in  the  world  to  deliver  you  from  a  thousand 
temptations  to  sin  and  vanity.  Pay  your  debts,  and  you  will  not 
have  wherewithal  to  buy  a  costly  toy  or  a  pernicious  pleasure.  Pay 
your  debts,  and  you  will  not  have  what  to  lose  to  a  gamester.  In 
short,  pay  your  debts,  and  you  will,  of  necessity,  abstain  from  many 
indulgences  that  war  against  the  spirit,  and  bring  you  into  capti^^ty 
to  sin,  and  cannot  fail  to  end  in  your  utter  destruction,  both  of  soul 
and  body. — Delany. 

L.  Wealth. — In  the  wealth  of  mankind,  nothing  is  included  which 
does  not  of  itself  answer  some  purpose  of  utility  or  pleasure.  To  an 
individual  anything  is  wealth  which,  though  useless  in  itself,  enables 
him  to  claim  from  others  a  part  of  their  stock  of  things,  useful  or 
pleasant.  Take,  for  instance,  a  mortgage  of  a  thousand  pounds  on  a 
landed  estate ;  this  is  wealth  to  the  person  to  whom  it  brings  in  a 
revenue,  and  who  could,  perhaps,  sell  it  in  the  market  for  the  full 
amount  of  the  debt.  But  it  is  not  wealth  to  the  country  ;  if  the  en- 
gagement were  annulled,  the  country  would  be  neither  richer  nor 
poorer;  the  mortgagor  would  have  lost  a  thousand  pounds,  and  tho 
owner  of  tho  land  would  have  gained  it. — J.  Stuart  Mill. 


A  CHAPTER  ON  YOUNG  MEN. 


Alexander,  of  Macedon,  extended  his  power  over  Greece,  conquered 
Egypt,  rebuilt  Alexandria  and  overrun  all  Asia,  and  died  at  38  years 
of  age. 

Hannibal  was  but  26,  when,  after  the  fall  of  his  father,  Hamilcar, 
in  S])ain,  and  Asdrubal,  his  successor,  he  was  chosen  commander-in- 
chief  by  the  Carthageuian  army.  At  27,  he  captured  Saguntum 
from  the  Romans  ;  before  he  was  34  he  carried  his  arms  from  Africa 
into  Italy,  conquered  Publius  Scipio  on  the  banks  of  the  Ticinus  ; 
routed  Sempronius  near  the  Trebia  ;  defeated  Flaminius  on  his  ai> 
proaches  to  the  Apennines  ;  laid  waste  the  whole  country  ;  defeated 
Fabius  Maximus  and  Varro,  marched  into  Capua,  and  at  the  age  of 
36  was  thundering  at  the  gates  of  Rome. 

Scipio  Africanus  was  scarcely  16  when  he  took  an  active  part  in 
the  battle  of  Cannae,  and  saved  the  life  of  his  father.  The  wreck  of 
the  Roman  cavalry  chose  him  then  for  their  leader,  ,and  he  conducted 
them  back  to  the  capital.  Soon  after  he  was  20,  he  was  appointed 
pro-consul  of  Spain,  where  he  took  NeAv  Carthage  by  storm.  He 
soon  after,  successfully,  defeated  Asdrubal,  Hannibal's  brother,  Mago 
and  Hann ;  crossed  into  Africa,  negotiated  with  Syphax,  the  Massa- 
sylian  king,  returned  to  Spain,  quelled  insurrections,  drove  the  Car- 
thagenians  wholly  from  the  peninsula,  returned  to  Rome,  devised 
the  divergion  against  the  Carthagenians  by  carrying  the  war  into 
Africa  ;  was  appointed  pro-consul  of  Africa,  crossed  thither,  destroyed 
the  army  of  Syphax,  compelled  the  return  of  Hannibal  and  defeated 
Asdrubal  a  second  time.     All  this  was  done  before  he  was  31. 

Charlemagne  was  crowned  king  of  the  Franks  before  he  waa  26. 
At  28  he  had  conquered  Aquitania,  and  at  29  he  had  made  himself 
master  of  the  whole  German  and  French  empires. 

Charles  XII.,  of  Sweden,  was  declared  of  age  by  the  states  and 
succeeded  his  father  at  15.  At  18  he  headed  the  expedition  against 
the  Danes,  whom  he  checked,  and  with  a  fourth  of  their  numbers,  he 
cut  the  Russian  army  to  pieces  commanded  by  the  czar,  Peter,  at 
Narva— crossed  the  Dwina,  gained  a  victory  over  the  Saxons,  and 
carried  his  arms  into  Poland.  At  21  he  had  conquered  Poland  and 
dictated  to  her  a  new  sovereign.     At  21  he  had  subdued  Saxony; 


A  CHAPTER  ON  YOUNG  MEN.  115 

and  at  27  he  was  conducting  his  victorious  troops  into  tho  heart  of 
Russia,  wlien  a  sevoro  wound  prevented  his  taking  command  in  per- 
son, and  resulted  in  his  overthrow  and  subsequent  treacherous  cap- 
tivity in  Turkey. 

Lafayette  was  a  major-general  in  the  American  army  at  19  ;  was 
but  20  when  he  was  woimded  at  Brandywine  ;  but  22  when  he  raised 
suppUcs  for  his  army,  on  his  own  credit  at  Baltimore  ;  was  but  2."J 
when  he  stormed  the  redoubt  at  Yorktown  ;  and  was  but  32  when 
the  French  revolution  raised  him  to  the  office  of  commander-in-chief 
of  the  national  guards. 

Napoleon  Bonapurte  commenced  his  military  career  as  an  officer 
of  artillery  at  17.  lie  successfully  commanded  the  artillery  at  the 
siege  of  Toulon  at  24.  His  splendid  and  victorious  campaign  in  Italy 
was  performed  at  the  age  of  27.  The  following  year,  when  he  was 
but  28,  he  gained  battle  after  battle  over  the  Austrians  in  Italy,  con- 
quered Mantua,  carried  the  war  into  Austria,  ravaged  the  Tyrol,  con- 
cluded an  advantageous  peace,  took  possession  of  Milan  and  the 
Venitian  republic,  revolutionized  Genoa,  and  formed  the  Cisali)ine 
republic.  At  29  he  received  the  command  of  the  army  against 
Egypt ;  scattered  the  clouds  of  Mameluke  cavalry  ;  mastered  Alex- 
andria, Aboukir  and  Cairo,  and  wrested  the  land  of  the  Pharoalis 
and  Ptolemies  from  the  i)roud  descendants  of  the  prophet.  At  30  he 
fell  among  the  Parisians  like  a  thunderbolt,  overthrew  the  dircctoral 
government  ;  dispersed  the  council  of  five  hundred,  and  was  pro- 
claimed first  consul.  At  31  he  crossed  the  Alps  with  an  army  and 
destroyed  the  Austrians  by  a  blow  at  Marengo.  At  32  he  established 
the  Code  Napoleon  ;  in  the  same  year  he  was  elected  consul  for  life 
by  the  people  ;  and  at  the  age  of  34  he  was  crowned  emperor  of  the 
French  nation. 

Papinian,  who  was  the  greatest  lawyer  Rome  ever  produced,  was 
put  to  death  by  Carracella  at  the  age  of  36.  He  had  even  at  that 
early  age  composed  more  than  fifty  books  on  legal  subjects.  So  pro- 
foundly learned  were  his  views  considered,  that  Valentinian  III. 
ordered  that  whenever  the  judges  were  divided  in  opinion,  that  Pa- 
pinian's  should  be  followed.  In  fact  he  was  the  great  oracle  of  the 
Roman  law  before  he  arrived  at  the  age  of  34. 

William  Pitt,  the  first  earl  of  Chatham,  was  but  27.  when,  as  a 
member  of  parliament,  he  waged  the  war  of  a  giant  against  the  cor- 
ruptions of  Sir  Robert  Walpole. 

The  younger  Pitt  was  scarcely  turned  of  20  when,  with  masterly 
j)Ower  he  grappled  with  tho  veterans  of  parliament,  in  favor  of  Amer. 
ica.  At  22  he  was  called  to  the  high  and  responsible  trust  of  chan- 
cellor of  the  exchequer.     At  24  he  was  appointed  first  lord  of,  tho 


116  A  CHAPTER   ON  YOUNG  MEN. 

treasury  and  chancellor  of  the  exchequer.  It  was  at  that  age  -when 
he  came  fortli  in  his  might  on  tlie  affairs  of  the  East  Indies.  At  the 
age  of  29,  during  the  first  insanity  of  George  III.,  he  rallied  around 
the  Prince  of  Wales. 

Edmund  Burke,  at  the  age  of  19,  planned  a  refutation  of  the  meta- 
physical theories  of  Berkley  and  Hume.  At  20  he  was  in  the  temple, 
the  admiration  of  its  inmates,  for  the  brilliancy  of  his  genius  and  the 
variety  of  his  acquisitions.  At  26  he  published  his  celebrated  satire, 
entitled  "  A  Vindication  of  Natural  Society."  The  same  year  he  pub- 
lished his  essay  on  the  sublime  and  beautiful — so  much  admired  for 
its  spirit  of  philosophical  investigation,  and  the  elegance  of  its  lan- 
guage.    At  2o  he  was  first  lord  of  the  treasury. 

George  Washington  was  only  27  when  he  covered  the  retreat  of  the 
British  troops  at  Braddock's  defeat  ;  and  the  same  year  was  ap- 
pointed commander-in-chief  of  all  the  Virginia  forces. 

General  Joseph  Warren  was  only  29  when,  in  defiance  of  the  Brit- 
ish soldiery  stationed  at  the  door  of  the  church,  he  pronounced  the 
calebrated  oration  which  aroused  the  spirit  of  liberty  and  patriot- 
ism that  terminated  in  the  achievement  of  independence.  At  34  he 
gloriously  fell  gallantly  fighting  in  the  cause  of  freedom,  on  Bun 
ker's  HiU. 

Alexander  Ilamilton  was  a  lieutenant-colonel  in  the  army  of  the 
American  revolution,  and  aid-de-camp  to  Washington  at  the  age  of 
20.  At  25  he  was  a  member  of  congress  from  New  York  ;  at  30  he 
was  one  of  the  ablest  members  of  the  convention  that  formed  the 
constitution  of  the  United  States.  At  31  he  was  a  member  of  the 
New  York  convention,  and  joint  author  of  the  great  work  entitled 
"  The  Federalist."  At  33  he  was  secretary  of  the  treasury  of  the 
United  States,  and  arranged  the  financial  branch  of  the  government 
upon  so  perfect  a  plan,  that  no  great  improvement  has  ever  been 
made  upon  it  by  Ms  successors. 

Tliomas  Hey  ward,  of  South  Carolina,  was  but  30  years  of  age,  when 
he  signed  the  glorious  record  of  the  nation's  birth — the  Declaration 
of  Independence  ; — Elhridge  Gerry,  of  Massachusetts,  Benjamin  Rush 
and  James  Wdson,  of  Pennsylvania,  but  31  ;  M^ttthew  Thornton,  of 
New  Hampshire,  32  ;  Thomas  Jefferson,  of  Virginia,  Arthur  Middle- 
ton,  of  North  Carolina,  and  Thomas  Stone,  of  Maryland,  33  ;  and  Wil- 
liam Hooper,  of  North  Carolina,  but  34. 

Thomas  Jefferson,  at  26,  was  a  leading  member  of  the  colonial  legis- 
lature in  Virginia.  At  30  he  was  a  member  of  the  Virginia  conven- 
tion ;  at  32  a  member  of  congress  ;  and  at  33  years  of  age  he  drafted 
the  Declaration  of  Independence. 


A  CHAPTER  ON  YOUNO  MEN.  117 

John  Jay,  at  30,  was  a  member  of  the  old  revolutionary  congress, 
and  being  associated  with  Lee,  and  Liciiigston  on  tlie  couimittce  lor 
draftinff  an  adilivss  to  the  people  of  Great  Britain,  drew  up  that 
pa]>er  liiiuself,  whicli  was  considered  one  of  the  must  eloquent  pro- 
ductions of  the  time.  At  ;}2  he  penned  tlie  old  constitution  of  New 
York,  and  in  the  same  year  was  appointed  chief  justice  of  that  state. 
At  34  he  was  appointed  minister  to  Spain. 

Fisher  Ames  was  highly  esteemed  as  a  public  man  in  his  own  state 
at  the  age  of  30  ;  at  which  age  he  was  chosen  as  member  of  con- 
gress from  the  SulF)lk  district,  Massachusetts  ;  and  before  he  was 
34,  held  the  assembled  statesmen  of  the  nation  breathless  by  his 
eloquence. 

Milton,  at  36,  had  written  his  finest  miscellaneous  poems,  including 
liis  L' Allegro,  Penseroso,  and  Com  us. 

Lord  Byron  at  the  age  of  30  published  his  celebrated  satire  upon 
the  English  bards  and  Scotch  reviewers;  at  24  the  two  first  cantos 
of  Childe  Harold's  Pilgrimage.  Indeed,  all  the  vast  poetic  treasures 
of  his  genius  were  poured  f  jrth  in  their  richest  profusion  before  he 
was  34  years  old  :  and  he  died  at  37. 

Mozart,  the  great  German  musician,  completed  all  his  noble  com- 
positions before  he  was  34,  and  died  at  35. 

Raphael,  the  illustrious  painter,  by  his  incomparable  works,  had 
acijuired  the  api)elhition  of  the  "  divine  Raphael "  long  before  he 
arrived  at  the  age;  of  30. 

Pop"  wrote  many  of  his  published  poems  by  the  time  he  was  16  ; 
at  20  his  Essay  on  Criticism ;  at  34  tlie  Rape  of  the  Lock,  and  at  35 
his  great  work,  the  translation  of  the  Iliad. 

Sir  Isaac  Newton  had  mastered  the  highest  elements  of  the  math- 
ematics, and  the  analytical  method  of  Descartes  bef(jre  he  was  20  ; 
had  discovered  the  new  method  of  infinite  series  of  Auctions,  and  his 
new  theory  of  light  and  colors.  At  35  he  had  discovered  the  prin- 
ciples of  the  reflecting  telescope,  the  laws  of  gravitation,  and  the 
planetarj'  system.  At  30  he  occupied  the  mathematical  chair  at 
Cambridge. 

Dr.  Dwight's  Conquest  of  Canaan  was  commenced  at  19,  and  fin- 
ished at  32.  At  the  latter  age  he  composed  his  celebrated  disserta- 
tion on  the  history,  eloquence  and  poetry  of  the  Bible,  which  was  im- 
mediately published  and  republished  in  Europe. 

Henry  Clay  was  a  member  of  the  Senate,  and  speaker  of  the  House 
of  Representatives,  before  he  was  33. 

Oliver  Hazard  Perry  was  but  37  when  he  achieved  the  victory  of 
Lake  Erie. 


118  A  MAGIC  SQUAEE  OF  SQUARES. 

A  MAGIC  SQUARE  OF  SQUARES. 

From  the  "  Young  Folks,"  published  by  Ticknor  &  Fields,  Boston. 


1 

.  27  . 

.  14  . 

.  57  . 

.  80  . 

.  67  . 

.  29  . 

.  53  . 

.  43 

75 

.  71  . 

.  58  . 

.  47  . 

.  43  . 

.  33  . 

.  19  . 

.  18  . 

.  5 

38 

.  84  . 

.  51  . 

.  10  . 

.   9  . 

.  23  . 

.  66  . 

.  62  . 

.  76 

25 

.  15  . 

.   2  . 

.  81  . 

.  68  . 

.  55  . 

.  53  . 

.  40  . 

.  30 

73 

.  59  . 

.  73  . 

.  44  . 

.  31  . 

.  48  . 

.  16  . 

.  6  . 

.  20 

35 

.  49  . 

.  39  . 

.   7  . 

.  24  . 

.  11  . 

.  63  . 

.  77  . 

.  64 

13 

.   3  . 

.  26  . 

.  69  . 

.  56  . 

.  79  . 

.  41  . 

.  28  . 

.  54 

60 

.  74  . 

.  70  . 

.  32  . 

.  46  . 

.  45  . 

.   4  . 

.  21  . 

.  17 

50 

.  37  . 

.  36  . 

.  22  . 

.  12  . 

.   8  . 

.  78  . 

.  65  . 

.  61 

The  above  square  contains  the  numbers  from  1  to  81  inclusive,  and 
has  the  following  properties  : 

1.  The  sum  of  any  row  of  nine  numbers,  vertical,  horizontal,  or 
diagonal,  is  369. 

2.  The  sum  of  any  nine  numbers  forming  a  square,  wherever  taken, 
is  369. 

3.  If  the  four  corner  numbers  (1,  42,  50,  61),  the  middle  numbers 
of  the  four  outside  rows  (80,  73,  20,  12),  and  the  central  number  (31) 
be  added  together,  their  sum  will  be  309. 

4.  The  sum  of  the  nine  numbers  similarly  situated  in  any  square 
formed  by  twenty-five  or  forty -nine  numbers  is  369.  [For  instance, 
71,  74,  18,  31,  43,"  46,  59,  6,  and  31.] 

One  or  more  vertical  rows  may  be  transferred  from  the  left  to  the 
right,  or  from  the  right  to  the  left,  or  one  or  more  horizontal  rows 
from  the  top  to  the  bottom,  or  from  the  bottom  to  the  top,  and  the 
properties  of  the  square  be  unchanged. 

Curiosities  of  Numbers. — When  the  number  9  is  multiplied  by  any 
other  number,  the  digits  of  the  product  when  added  together  will 
always  be  9  or  a  multiple  of  9.  Thus  9  multiplied  by  2  equals  18  ; 
and  1  and  8  make  9.  Nine  by  11  equals  99.  Nine  by  14  equals  136 ; 
and  1,  3,  and  6  make  9. 

Another  singular  fact  is,  that  if  any  number  be  taken,  its  digits  re- 
versed in  order,  and  the  new  number  subtracted  from  the  other,  the 
remainder  will  be  9  or  a  multiple  of  9,  and  the  sum  of  its  digits  will 
be  9  or  a  multiple  of  9.  Thus  63  minus  30  equals  37  ;  which  is  thrice 
9,  and  3  plus  7  equals  9. 

The  same  property  is  found  in  the  squares,  cubes,  etc.,  of  any  num- 
bers thus  transferred.  Thus  the  square  of  63  is  3.960,  and  that  of  36 
is  1,396.  Subtracting  the  latter,  the  remainder  is  3,673,  a  multiple 
of  9,  and  the  sum  of  its  digits  is  twice  9. 


SUPREME    JUDICIAL    COURT    DECISIONS.  119 

DECISIONS   OF  THE    SUPREME   JUDICIAL    COURT   OF 
MASSACHUSETTS. 

I.  Cashier,  <J-c.  —  II.  Promissori/  Notes  and  Bills  of  Exchange.  —  III 
Bank  Notes.  —  IV.  Notaries  Public.  —  V.  Stockholders,  i^c.  —  VI.  Banks 
Banking,   (^c. 

I.    CASHIER,  ETC. 

General  Authority.  —  The  authority  of  officers  of  banks  is  restricted  to 
such  modes  of  binding  the  company  as  result  from  the  nature  of  their 
duty  and  the  powers  vested  in  them  by  their  offices.  The  property  of 
stockholders  is  not  bound  by  their  irregular  transactions,  or  by  the 
declarations  or  confessions  of  their  officers,  beyond  the  legal  sphere  of 
their  action.    ]V!/man  v.  Hallowell,  ^-c,  Bank,  14  Mass.  62.     i?  Mass.  29. 

Bond.  —  Where  a  statute  prohibited  any  bank  from  issuing  bills  paya- 
ble at  any  place  except  at  the  bank,  and  a  cashier,  on  receiving  bills 
not  proved  to  have  been  issued  after  the  statute  was  passed,  (which  had 
been  taken  up  and  paid  by  another  bank,  at  which  they  were  made  pay- 
able,) put  them  again  into  circulation  for  his  own  use  ;  it  was  held  to  be 
a  breach  of  his  bond  given  for  the  faithful  performance  of  his  duty,  for 
which  his  sureties  were  liable.     Dedham  Bank  v.  Chickering,  4   Pick. 

Aliter,  where  he  embezzled  new  bills,  made  by  consent  of  the  direct- 
ors, and  intended  to  be  privately  kept  and  surreptitiously  issued  by  him, 
after  the  statute  was  passed,  and  in  direct  violation  of  it,  such  bills  not 
being  intended  to  make  part  of  the  ostensible  funds  of  the  bank,  and  not 
being  entered  on  its  books,  nor  noticed  in  the  half-yearly  returns  to  the 
governor  and  council.     lb.  314. 

Nor  are  a  cashier's  sureties  liable  on  his  bond  for  his  not  accounting 
to  the  bank  for  their  money  collected  by  him  as  an  attorney  at  law.     lb. 

Nor  for  his  surreptitiously  conveying  his  shares  in  the  bank  to  a  third 
person  by  means  of  blank  certificates  signed  by  the  president  and 
deposited  in  the  cashier's  hands,  though  he  had  previously  pledged  the 
shares  to  the  bank  as  security  for  the  payment  of  his  notes.     lb. 

But,  in  such  case,  the  bank  may  apply,  towards  payment  of  the 
cashier's  notes,  a  balance  standing  on  its  books  in  his  favor,  instead  of 
applying  it  for  the  sureties'  benefit,  in  reducing  damages  for  breach  of 
the  bond.     lb. 

Bond.  —  Where  a  board  of  directors,  by  a  vote,  approved  of  two  pei 
sons  as  sureties  in  a  bond  to  be  given  by  the  cashier,  and  a  bond,  dulj 
executed  by  them  and  the  cashier,  was  afterwards  found  in  the  posses 
sion  ol  the  president,  it  was  held,  that  there  was  a  sufficient  acceptancf 
thereot  by  the  corporation.  Dedhari  Batik  v.  Chickering,  3  Pick  335 
S.  P    1  Har.  &  Gill,  ubisuj). 


120  DECISIONS    OF    THE    SUPREME    JUDICIAL 

Bond.  —  Where  a  cashier,  before  his  re-appointment  to  office,  had 
misapplied  the  funds  of  the  bank,  and,  after  his  re-appointmenl,  bor- 
rowed money,  as  cashier,  and  placed  it  in  the  bank,  to  conceal  his  de- 
linquency, and  afterwards  returned  the  money  so  borrowed,  and  was 
dismissed  as  a  defaulter,  it  was  held  that  the  sureties  on  his  last  bond 
were  answerable ;  as  the  money  that  he  so  placed  in  the  bank  became 
the  property  of  the  bank,  and  his  subsequent  conduct  was  a  bread  of 
the  condition  of  that  bond.     Ing-raham  v.  Maine  Bank,  13  Mass.  2n8. 

Endorsement.  —  Where  a  note  endorsed  by  the  payee  to  a  bank  of 
which  P.  H.  F.  was  the  cashier,  was  again  endorsed  as  follows  :  "  P.  H. 
F.,  cashier,"  it  was  held,  that  such  second  endorsement  was  sufficient. 
And  it  seems,  that  in  an  action  upon  such  note,  by  the  second  endorsee 
against  the  payee,  if  the  second  endorsement  is  not  sufficiently  certain, 
the  plaintiffs  may,  at  the  trial,  prefix  the  name  of  the  bank  to  such 
fndorsement.     Folger  v.  Chase,  Pickering's  Mass.  Reports,  63. 

An  endorsement  written  on  a  slip  of  paper,  which  was  attached  to  the 
oack  of  a  note  by  a  wafer,  for  the  purpose  of  writing  receipts  of  partial 
payments  thereon,  there  not  being  room  on  the  back  of  the  note,  was 
held  to  be  sufficient ;  the  endorsement  having  been  made  after  several 
of  such  receipts  had  been  written  on  such  attached  paper.     lb. 

Appointment.  —  Where,  by  the  charter  of  a  bank,  the  directors  were  to 
»e  chosen  annually,  and  they,  "  for  the  time  being,  have  power  to 
appoint  a  cashier,  and  such  other  officers  under  them,  as  may  be  neces- 
sary for  executing  the  business  of  said  corporation,"  a  cashier  so 
ippointed  is  an  officer  of  the  corporation,  the  duration  of  whose  office,  in 
(he  absence  of  an  express  limitation,  is  limited  only  by  the  duration  of 
the  charter;  but  he  is  liable  to  be  removed  by  the  directors  as  occasion 
may  require,  and  is  not  necessarily  an  annual  officer.  Union  Bank  of 
Maryland  v.  Ridgely,  1  Har.  &;  Gill,  324.  S.  P.  Dedham  Bank  v.  Chick- 
ering,  3  Pick.  341. 

Act  of  President.  —  The  president  of  a  bank  may  transfer,  by  his  en- 
dorsement, a  note  made,  &cc.,  to  the  corporation,  if  he  has  a  general 
authority  for  that  purpose  from  the  directors  ;  and  the  seal  of  the  corpor- 
ation need  not  be  affixed  to  the  transfer,  nor  a  particular  vote  therefor 
be  passed  on  the  subject.  Spear  v.  Ladd,  11  Mass.  94.  Northampton 
Bank  v.  Fepoon,  11  Mass.  288. 

Transfer  of  Securities.  —  The  cashier  of  a  bank  cannot  assign  notes 
belonging  to  it,  unless  authorized  by  the  bank,  or  by  the  directors,  pur- 
suant to  powers  vested  in  them.     Hartford  Bank  v.  Barrij,  17  Mass.  94. 

But  his  endorsement  of  such  notes  would  authorize  the  holders  to  de- 
liver them  to  the  makers  or  endorsers  who  should  pay  them ;  and  pay 
ment  to  the  holders  would  be  a  discharge.     lb 


COURT    OF    MASSACHUSETTS.  121 

"1.     PROMISSORY    NOTES    AND    BILLS    OF    EXCHANGE. 

Memorjndum  Check.  —  A  bona  fide  holder  of  a  memorandum  check,  (a 
iheck  not  addressed  to  any  particular  bank  or  person,)  payable  to 
bearer,  may  maintain  an  action  on  it  against  the  drawer,  in  his  own 
name,  though  it  came  into  his  hands  five  years  after  its  date.  Ellis  v. 
Wheeler,  3  Pick.  18. 

But  the  burden  of  proof,  in  case  of  a  check  of  this  kind,  is  on  the 
holder ;  and  he  cannot  recover  on  it  without  proof  that  he  obtained  it 
fairly  and  for  a  valuable  consideration.     Ball  v.  Allen,  15  Mass.  433. 

Joint  Note.  —  Where  a  joint  and  several  promissory  note  was  executed 
and  left  in  the  hands  of  M.,  one  of  the  promisors,  to  be  delivered  to  the 
payee,  when  it  should  be  demanded  by  him,  in  exchange  for  a  note  for 
the  same  amount,  but  of  a  previous  date,  and  signed  by  M.  alone,  and 
no  demand  was  made  therefor  by  the  payee  before  the  death  of  M.,  ii 
was  held,  that  the  new  note  did  not  operate  de  facto  as  a  payment  of  the 
old  note,  that  the  property  in  such  new  note  had  not  vested  in  the 
payee,  and  that  he  could  not  recover  the  possession  of  it  from  the 
administrator  of  M.,  it  being  presumed  that  the  interest  which  had 
accrued  upon  the  old  note  was  to  be  paid  upon  making  the  exchange. 
Canfield  v.  Ives.     Pickering's  Mass.  Reports,  253. 

Note  on  Demand.  —  In  the  case  of  a  note  endorsed  after  it  has  become 
due,  the  endorser  is  not  liable  unless  payment  be  demanded  of  the 
maker  and  notice  of  the  non-payment  given  to  the  endorser ;  and  as 
such  a  note  has  become  payable  on  demand,  the  demand  on  the  maker 
must  be  made  within  a  reasonable  time,  and  immediate  notice  of  non- 
payment given  to  the  endorser.     Colt  v.  Barnard,  ib.  260. 

Void  Notes.  —  A  promissory  note  given  for  compounding  a  public 
prosecution  for  a  misdemeanor,  is  founded  upon  an  illegal  considera- 
tion.    Jones  V.  Bice,  ib.  440. 

Drawer  of  Bill.  —  The  drawer  of  a  bill  of  exchange  having  no  effects 
in  the  hands  of  the  acceptor  from  the  time  when  the  bill  was  drawn  to 
the  time  when  it  became  due,  was  held  liable  without  proof  of  demand 
and  notice  of  non-payment.  Kinsley  v.  Robinson.,  Pickering's  Reports,  327. 

In  an  action  by  the  endorsee  against  the  drawer  of  a  bill  of  exchange, 
the  acceptor  is  a  competent  witness  to  prove  that  he  has  not  had  in  his 
hands  any  funds  of  the  drawer.     Ib. 

Foreign  Law.  —  In  an  action  against  the  endonser  of  a  promissory 
note  of  hand,  made  in  Illinois,  the  plaintiff  must  prove  that  judgment 
has  been  recovered  against  the  original  promisor,  and  remains  unsatis- 
fied. 

"  We  think  the  law  of  Illinois  is  to  govern  in  this  case.  This  provis- 
ion, respecting  the  liability  of  endorsers  goes  not  to  the  remedy  merely, 
11 


122  DECISIONS    OF   THE    SUPREME    JUDICIAL 

but  to  the  substance  of  the  contract  and  is  a  part  of  it  j  and  it  makes  no 
difference  that  the  note  in  the  present  case  is  payable  generally  to  order. 
There  being  no  evidence  that  the  plaintiff  has  complied  with  the  law  of 
Illinois,  the  default  wnich  was  entered,  must  be  set  aside,  and  the  cause 
stand  for  trial." 

Mutilation.  —  Where  a  promissory  note  has  been  mutilated  of  its  sig- 
nature,  if  the  facts  shown  explain  the  mutilation,  it  is  not  necessary,  in 
Massachusetts,  that  the  party  suing  on  it  should  first  apply  to  a  court 
of  equity  for  a  complete  instrument.  Spencer  v.  Bemis,  Mass.  Court  of 
Common  Pleas. 

Delivery.  —  A  negotiable  note,  payable  to  order,  is  transferable  by 
delivery  merely,  so  that  the  party  receiving  it  may  be  authorized  to 
demand  payment  of  it  and  deliver  it  up  to  the  maker,  though  it  is  unen- 
dorsed,    lb. 

Title.  —  Possession  of  a  negotiable  note  is  prima  facie  evidence  of  title 
and  ownership  in  the  holder.  Therefore,  where  the  makers  of  a  note, 
payable  to  order,  took  it  up  in  good  faith  from  a  party  presenting  it  for 
payment,  the  note  bearing  on  it  an  endorsement  alleged  to  be  forged,  it 
was  held,  on  the  question  of  nghtful  payment  by  the  makers,  that  the 
party  presenting  it  was  to  be  presumed  to  have  authority  to  receive  pay- 
ment for  it  and  deliver  it  up ;  and  that  proof  of  forgery  of  the  endorse- 
ment would  not  be  conclusive  against  his  right  to  bind  the  payee  by  his 
acts. 

Lost  Notes.  —  If  a  negotiable  promissory  note  be  stolen  or  lost,  and 
paid  by  the  makers  in  good  faith  on  a  forged  endorsement,  it  seems  that 
a  delay  of  eighteen  months  and  upwards  by  the  payee  to  notify  the 
makers  of  his  loss,  (it  not  being  shown  when  he  first  discovered  it,)  is 
not  such  absolute  evidence  of  negligence  on  his  part,  as  to  prevent  his 
recovering  the  value  of  the  note  from  the  makers.     lb. 

Foreign  Larv.  —  "When  the  drawee  of  a  bill  of  exchange,  who  resides 
m  New  York,  writes  a  letter  there  to  the  drawer,  who  resides  in  this 
state,  accepting  the  bill,  which  was  drawn  in  this  state,  the  contract  of 
acceptance  is  made  in  New  York,  and  is  governed  by  the  law  of  that 
state  ;  and  the  bill  must  be  presented  there  to  the  acceptor  for  payment. 
Worcester  Bank  v.  Wells,  8  Metcalf's  Massachusetts  Reports,  p.  107. 

By  the  law  of  New  York,  an  acceptance  of  a  bill  of  exchange,  "  writ- 
ten on  a  paper  other  than  the  bill,  shall  not  bind  the  acceptor,  except  in 
favor  of  a  person  to  whom  such  acceptance  shall  have  been  shown,  and 
who,  on  the  faith  thereof,  shall  have  received  the  bill  for  a  valuable  con- 
sideration." A.  drew  a  bill  on  B.,  in  New  York,  and  procured  it  to  be 
discounted  at  a  bank :  B.  afterwards  wrote  a  letter  to  A.,  accepting  the 
bill,  and  A.  exhibited  the  letter  to  the  officers  of  the  bank.  Held,  thai 
the  bank  could  not  maintain  an  action  against  B.  on  his  acceptance.   Fo. 


COURT    OF    MASSACHUSETTS.  123 

A  promise  to  accept  a  bill  of  exchange  is  a  chose  in  action,  on  which 
ao  one  beside  the  immediate  promisee  can  maintain  a  suit  in  his  own 
name.     lb. 

Geitx-'neness.  —  To  prove  forgery  of  a  party's  hand-writing,  other  spec 
imens  of  it,  though  not  belonging  to  the  case,  or  admitted  to  be  genuine, 
may  be  introduced  in  evidence  on  collateral  proof  of  their  genuineness. 
Ishi  Spencer  v.  Seth  Bemis  et  al,  Mass.  Reports  Common  Pleas,  1815. 

Damages.  —  An  acceptor  of  a  bill  of  exchange  is  not  liable  to  the 
payee  or  endorsee  for  damages  caused  by  non-payment,  but  only  for  the 
amount  of  the  bill,  with  interest  and  costs  of  protest.  Buwen  v.  Stod- 
dard, 10  Metcalf,  375. 

Foreign  Law.  —  The  statute  of  Maine,  which  enacts  that,  in  an  action 
on  a  bill  of  exchange  drawn  or  endorsed  in  that  state,  payable  in  this 
state,  and  protested  for  non-payment,  the  holder  shall  recover  three  per 
cent,  damages,  in  addition  to  the  contents  of  the  bill  and  interest,  does 
not  entitle  the  holder  to  recover  those  damages  in  a  suit  brought 
against  the  acceptor  in  the  courts  of  this  state.  Fiske  v.  Foster,  lb.  597. 
JJsurij.  —  The  Bank  of  Orleans,  at  Albion,  in  the  State  of  New  York, 
discounted  a  bill  of  exchange,  deducting  a  little  less  than  legal  interest 
for  the  time  it  had  to  run,  and  gave  the  holder,  at  his  request  and  for 
his  accommodation,  a  draft  payable  in  its  own  bills,  on  a  bank  at 
Albany,  where  by  law  it  was  required  to  redeem  them  at  a  discount  not 
exceeding  one  half  of  one  per  cent.;  and  the  holder  received  those  bills 
at  par.  The  bank  at  Albany  was  the  agent  of  the  Bank  of  Orleans  for 
the  redemption  of  its  bills,  and  paid  the  holder  of  the  discounted  bill  in 
the  paper  of  the  latter  bank,  which  then  passed  current  at  par :  and  that 
bank  paid  to  the  bank  at  Albany  the  amount  of  said  draft  in  full.  Held, 
that  these  facts  did  not  prove  that  the  bill  was  discounted  on  an  usuri- 
ous consideration  or  agreement.  "To  constitute  usury,  within  the  pro- 
hibitions of  the  law,  there  must  be  an  intention  knowingly  to  contract 
for  or  take  usurious  interest ;  for  if  neither  party  intend  it,  but  act  bona 
fide  and  innocently,  the  law  will  not  infer  a  corrupt  agreement."  Bank 
of  Orleans  v.  John  Curtis  and  others,  11  Metcalf,  359. 

Usury.  —  A.  gave  a  note  to  B.,  on  demand,  and  B.,  at  the  expiration  of 
a  year,  computed  the  interest  thereon  at  nine  per  cent.,  and  took  from 
A.  a  new  note  for  the  principal  sum  and  for  the  interest  so  computed. 
Nineteen  months  afterwards,  B.  computed  the  interest  on  the  second 
note,  at  ten  per  cent,  per  annum,  and  added  compound  interest,  and  A. 
gave  him  a  new  note  for  a  sum  which  included  the  principal  of  the  sec- 
ond note,  and  the  interest  thereon,  so  computed,  and  also,  another  sum 
which  was  justly  due  from  him  to  B.  Held,  in  a  suit  on  this  last  note, 
that  by  the  Revised  Statutes,  c.  35,  the  plaintiff,  on  proof  of  the  usurious 
contract,  was  entitled  to  recove-  the  amount  of  the  note,  with  interes*. 


124  DECISIONS    OF    THE    SUPREME    JUDICIAL 

'hereon,  deducting  therefrom  three-fold  the  amount  of  the  intertst,  cojd- 
fiound  as  well  as  simple,  computed  on  the  first  two  notes,  and  of  the 
interest  which  had  accrued  on  the  note  in  suit.  Upham  v.  Brinhall,  ib. 
•526. 

Interest. —  A  promissory  note,  for  the  payment,  "ten  years  after 
date,"  of  "seven  hundred  and  fifty  dollars,  with  interest  semi-annually, 
fifty  dollars  of  the  principal  to  be  paid  annually  until  the  whole  is  paid," 
is  a  contract  that  the  interest  shall  be  paid  semi-annually,  that  fifty  dol- 
lars of  the  principal  shall  be  paid  annually,  and  that  the  whole  amount 
of  the  note,  principal  and  interest,  shall  be  paid  in  ten  years  after  date. 
Eiver  V.  Myrick,  1  Gushing,  16. 

The  promisee,  by  an  agreement  under  seal,  executed  on  the  same 
day  with  the  note,  covenanted  with  the  promisor,  that  "if  said  note 
should  not  be  paid  at  the  expiration  of  the  said  ten  years,"  he  would 
"  give  up  said  note  "  to  the  promisor,  provided  the  latter  should  execute 
to  him  a  quit-claim  deed  of  certain  laud  mentioned  in  the  agreement. 
It  was  held,  that  this  agreement  (assuming  that  the  note  and  agreement 
constituted  an  entire  transaction,  which  the  court  did  not  decide)  did 
not  preclude  the  promisee  from  enforcing  payment  of  the  interest,  and 
Buch  instalments  as  should  become  due,  before  the  expiration  of  the  tea 
years.     Ib. 

Dissolution. — B.  H.,  after  the  dissolution  of  a  partnership  between 
himself  and  S.  W.,  made  a  negotiable  promissory  note,  in  the  name  of 
the  late  firm  of  \V.  &c  H.,  payable  to  S.  W.  and  S.  F.  as  partners  under 
the  firm  of  W.  and  F.;  and,  after  a  dissolution  of  the  last-named  firm, 
and  the  death  of  S.  W.,  S.  F.,  in  the  name  of  \V.  and  F.,  indorsed  the 
note  to  himself:  —  it  was  held,  that  S.  F.,  could  not  maintain  an  action 
on  the  note,  as  indorsee  ;  but  that  as  surviving  promisee  he  was  en- 
titled to  recover,  on  the  money  counts,  against  B.  H.,  either  as  sur- 
viving promisor,  if  the  note  had  been  subsequently  ratified  by  S.  W.,. 
or  as  sole  promisor,  if  it  had  not  been  so  ratified.  Fowle  v.  Harrington, 
Ih.  146. 

Consideration.  —  A  promise  to  forbear,  for  six  months,  to  sue  a  third 
person,  on  a  just  cause  of  action,  is  a  valid  and  sufficient  consideration 
for  a  promissory  note.     Jennison  v.  Stafford,  ib.  168. 

Forbearance.  —  In  a  suit,  by  the  payee  against  the  maker,  on  a  promis 
sory  note,  given  in  consideration  of  a  promise  to  forbear  to  sue  a  third 
person  for  six  months,  the  burden  of  proof  is  not  on  the  payee,  to  show 
that  he  has  forborne  according  to  his  promise,  but  on  the  maker,  to 
show  that  he  has  not.     Ib. 

Title.  —  Where  the  payee  of  a  negotiable  pr  missory  note,  for  the 
purpose  of  indemnifying  one  who  had  become  his  surety  for  the  pay- 
ment of  the  fees  and  expenses  attending  the  institution  of  proceedings 


COURT    OF    MASSACHUSETTS.  125 

in  insolvency,  negotiated  and  transferred  the  note  to  the  surety,  before 
the  commenceineiit  of  such  proceedings,  it  was  held,  that,  in  the  ab 
sence  of  fraud,  the  maker  of  the  note  could  not  set  up  in  defence  the 
title  of  payee's  assignee,  and  that  it  was  immaterial  whether  the  note 
was  endorsed  by  the  payee  before  or  after  his  insolvency.  Fogg  v. 
Willcvtt,  lb.  300. 

Letter  of  Credit.  —  Mills  &  Co.,  of  Boston,  wrote  letters  to  B.,  in  T^.evv 
Orleans,  as  follows :  "  1.  You  may  have  opportunities  to  make  ad 
vances  on  cotton  shipped  to  this  port,  and  we  should  be  willing  tc 
accept  against  shipments  to  us,  the  necessary  papers  accompanying  the 
bills,  for  such  sums  as  in  your  judgment  may  be  safely  advanced.  2. 
We  do  not  want  cotton  under  limits.  Your  advances  ought  not  to 
exceed  three  quarters  the  value.  Under  these  restrictions,  you  may  go 
on,  and  your  bills  shall  be  duly  honored,  accompanied  by  bills  of  lading 
and  orders  for  insurance."  B.  showed  these  letters  to  C,  and  sold  to 
him  bills  drawn  on  M.  &;  Co.,  in  favor  of  C.'s  principals,  and  paid,  with 
the  money  received  from  C,  for  cotton,  which  he  shipped  to  M.  &  Co., 
in  his  own  name.  No  bills  of  lading  nor  orders  for  insurance  accompa- 
nied these  bills,  and  M.  &  Co.  refused  to  accept  or  pay  them.  Held,  in 
suits  by  the  payees  against  M.  Ac  Co.,  as  acceptors  of  the  bills  undei 
their  promise  to  accept  and  pay  them,  that  they  were  not  liable  ;  that  B.'a 
authority  was  limited  and  special,  and  that  he  had  exceeded  it  by  draw- 
ing the  bills  without  accompanying  them  with  bills  of  lading  and  orders 
for  insurance  ;  and  that  C,  the  payee's  agent,  knowing  the  contents  of 
M.  &  Co.'s  letters  to  B.,  took  the  bills  on  his  personal  confidence  in  B.,. 
and  not  on  the  obligation  of  M.  &  Co.  to  honor  them.  When  merchants 
in  Boston  authorize  an  agent  to  make  advances  on  cotton  at  New 
Orleans,  to  be  shipped  to  them  for  sale  at  Boston,  and  promise  to  accept 
bills  drawn  on  them  to  an  amount  not  exceeding  three  fourths  of  the 
value  of  the  cotton,  the  value  at  New  Orleans  is  intended  ;  and  there- 
fore, in  a  question  as  to  the  amount  for  which  the  agent  is  authorized  to 
draw,  evidence  of  the  value  of  cotton  at  Boston  is  not  admissible. 
Murdoch  ^  Coolidge  v.  Mills,  Metcalf,  Sup.  Jud.  Court  Reports,  vol.  xi 

III. BANK    NOTES. 

Redemption  in  C<?m.  — Under  the  act  establishing  the  Chenango  Bank, 
which  imposes  a  penalty  of  M  per  cent,  until  tender,  for  refusing  pay- 
ment of  its  notes,  it  was  held  that  payment  must  be  made  within  a 
reasonable  time  after  demand,  according  to  circumstances;  that  a  sum 
of  ordinary  magnitude  should  be  paid  at  least  during  the  day  of  de- 
mana ;  that  the  officers  must  employ  themselves  diligently,  in  paying,  in 
the  order  of  time  that  demands  are  made  ;  that  the  bank  cannot,  at  its 
option,  pay  in  small  pieces  when  it  has  large  in  its  vault,  thus  causing 
11* 


126  DECISIONS    OF    THE    SUPREME    JUDICIAL 

delay ;  that  it  should  keep  money  counted  out,  or  servants  sufficiiint  to 
count  it  out  in  a  reasonable  time,  and  that  unreasonable  delay  was 
refusal  to  pay,  and  subjected  the  bank  to  said  penalty.  Hubbard  v. 
Chenango  Bank,  8  Cow.  88.     See  .3  Mason,  1. 

Void  Notes.  —  Before  the  passing  of  the  Massachusetts  statute  of 
1816,  chapter  91,  there  was  nothing  in  the  charters  of  the  banks  of  that 
state  which  prohibited  them  from  issuing  drafts  on  a  bank  in  another 
state,  where  they  had  funds  deposited,  for  small  sums,  with  the  inten- 
*ion  of  their  being  circulated  as  bank  bills.  King  v.  Dedham  Bank,  15 
Mass.  447.     See  Post,  63. 

Re-charter.  —  Where  a  new  bank  was  incorporated  with  the  same 
name  as  the  old  one,  whose  charter  was  expiring,  the  new  bank  was 
held  not  to  be  responsible  for  the  notes  of  the  old,  though  a  major  part 
of  the  stockholders  were  the  same  in  each.  Bellows  v.  Ilollowell,  ^-c. 
Bank,  2  Mason,  31.     See  also  14  Mass.  58. 

Illegal  Issues.  —  The  statute  of  1816.  c.  91,  sect.  2,  so  far  as  it  enacted 
that  every  bank,  which  had  issued  any  bill,  &c.,  payable  at  any  other 
place  than  where  the  bank  was  established  by  law  and  kept,  should  be 
liable  to  pay  the  same  on  demand  at  said  bank,  without  a  previous 
demand  at  the  place  where  it  might,  on  its  face,  be  made  payable,  was 
inoperative,  and  not  binding  on  the  parties  to  such  bills,  &c.,  nor  on  the 
courts.     King  v.  Dedham  Bank,  15  Mass.  447.     See  Ante,  38. 

Hence,  if  a  banking  company,  incorporated  by  the  same  name  of  a 
former  one,  appoint  the  same  president  and  cashier,  and  the  officers 
receive  and  issue  the  notes  of  the  former  company,  and  declare  that 
there  is  no  difference  between  the  notes  thus  issued  and  those  of  the 
new  company,  the  new  company,  never  having  authorized  these  proceed- 
ings, are  not  liable  to  pay  such  notes.  14  Mass.  62.  See  also  Bellows 
V.  Hallomell,  (f-c,  Bank,  2  Mason,  31. 

Forgid  Signatures. — "Where  a  bank  paid  notes  on  which  the  presi- 
d-rnt's  name  was  forged,  and  did  not  return  them  till  fifteen  days  after- 
wards, it  was  held  that  it  had  lost  its  remedy  against  the  person  from 
whom  the  notes  were  received.  Gloucester  Bank  v.  Sale?n  Bank,  17 
Mass.  33. 

Stolen  Notes.  —  Where  the  bills  of  a  bank,  after  being  prepared  by 
the  cashier  for  the  president's  signature,  were  stolen,  and  a  forged  sig- 
nature of  the  president  added,  the  bank  was  held  not  to  be  liable  to  pay 
a  bona  fide  holder,  on  the  ground  that  the  cashier  had  declared  them  to 
be  genuine,  nor  by  reason  of  the  negligence  of  the  directors  in  so  keep- 
ing the  paper  prepared  for  signature.     Salan  Bank  v.  Gloucester  Bank,  ib. 

Payment  in  Coin.  —  The  holder  of  bank  bills  is  entitled  to  be  paid  ia 
specie  upm  demand  made  on  the  bank,  within  the  usual  banking  hours ; 
and  he  is  not  obliged  to  take  foreign  gold  and  silver  at  the  bank  count 


COURT    OF    MASSACHUSETTS.  127 

but  the  payment  must  be  by  weight.     Suffolk  Bank  v.  Lincoln  Bank,  3 
Mason,  1. 

Where  one  bank  holds  the  bills  of  another,  and  demands  payment,  it 
is  not  obliged  to  receive  its  own  bills  in  payment,  at  the  other's  banking- 
house,    lb. 

IV. NOTARIES     PUBLIC. 

Presentment  for  Payment.  —  If  a  note  is  made  payable  at  a  bank,  there 
is  no  default  of  payment  on  the  part  of  the  maker  until  the  close  of  the 
usual  banking-hours,  on  the  last  day  of  grace,  at  such  bank.  If  no  par- 
ticular bank  is  named,  the  hour  will  be  determined  by  the  usual  bank- 
ing hours  of  the  bank,  or  several  banks,  in  the  place  where  the  note  is 
payable.     Chase  v.  Clark,  21  Pickering,  310. 

Notice  to  Adriiinistratnr.  —  Where  the  administrator  of  an  endorser  of  a 
promissory  note  had  been  appointed  to  that  office  before  the  maturity  of 
tiie  note,  and  had  given  due  notice  of  the  appointment,  it  was  held,  that 
he  was  entitled  to  the  same  notice  of  the  non-payment  of  the  note,  as  is 
required  by  law  to  be  given  to  an  endorser.  Oriental  Bank  v.  Blake,  22 
Pickering,  24. 

Demand.  —  Where  a  note  is  payable  on  demand  at  a  specified  bank, 
no  demand  need  be  made  at  any  other  place,  and  in  an  action  against 
an  endorser,  it  will  be  presumed,  in  the  absence  of  evidence  to  the  con- 
tiary,  that  the  note  was  at  the  bank,  and  that  some  othcer  of  the  bank 
was  in  attendance  to  receive  payment.  Fulger  v.  Chase,  18  Pickering's 
Reports,  63. 

It  is  a  sufficient  demand  and  refusal  to  constitute  a  dishonor  of  a  note, 
if  the  maker,  on  the  day  it  is  due,  calls  on  the  holder  at  his  place  of 
business,  where  the  note  is,  and  declares  that  he  is  unable  to  pay  it,  and 
shall  not  pay  it,  and  desires  le  holder  to  give  notice  to  the  endorser 
3  Metcalf,  495. 

Notice.  —  A  notice  given  to  tha  endorser  of  a  note,  in  the  forenoon  of 
the  day  on  which  it  becomes  due,  merely  stating  that  the  person  giving 
notice  holds  the  note,  and  that  it  is  due  and  unpaid,  and  demanding 
payment,  is  not  sufficient  to  charge  the  endorser.     lb. 

Notice  Insufficient.  —  A  notice  to  the  endorser  of  a  note,  which  merely 
states  that  the  note  remains  unpaid,  and  that  the  holders  look  to  him 
for  payment,  is  not  sufficient  to  charge  the  endorser,  ahhough  such 
notice  is  given  by  a  notary  public.     9  Metcalf,  174. 

V. STOCKHOLDERS,    RIGHTS    OF,    ETC. 

Liability  for  Issues.  —  An  act  incorporating  a  banking  company  pro- 
vided that  if  the  corporation  should  refuse  or  neglect  to  pay  their  bills 
on  demand,  "  the  criginal  stockholders,  their  successors,  assigns,  and 


]88  DECISIONS    OF   THE    SUPREME    JUDICIAL 

the  members  of  the  corporation,"  should,  in  their  private  capacities,  be 
liable  to  the  holder.  Held,  that  such  only  of  the  original  stockholders, 
their  successors,  iXcc,  as  were  members  of  the  corporation  at  the  time 
payment  was  refused,  were  liable.     Bond  v.  Appleton,  8  Mass.  472. 

Subscription  to  Stock.  —  A  stockholder  in  a  bank  that  is  authorized  to 
commence  business  with  one  amount  of  stock,  and  to  increase  the 
amount  afterwards,  is  entitled  to  subscribe  for  and  hold  the  additional 
stock,  in  proportion  to  his  original  shares ;  and  the  bank  is  liable  to  him, 
if  its  officers,  or  the  corporation,  refuse  to  allow  him  thus  to  subscribe 
therefor ;  and  the  measure  of  damages  will  be  the  excess  of  the  market 
value  above  the  par  value  of  the  number  of  shares  to  which  he  was  en- 
titled, with  interest  on  such  excess.  Gray  v.  Portland  Bank,  3  Mass. 
364. 

Sale  of  Pledged  Stock.  —  A  stockholder  of  a  bank  transfers  his  shares 
to  the  corporation  by  a  writing  absolute  in  form,  and  surrenders  his 
certificate  of  stock,  and  at  the  same  time  leaves  with  the  cashier  an 
agreement,  in  which,  after  reciting  that  he  had  transferred  the  shares 
as  collateral  security  for  the  payment  of  a  certain  note  to  the  bank,  he 
covenants  that  if  the  note  shall  not  be  duly  paid,  the  bank  may  sell  the 
shares  and  apply  the  proceeds  to  the  payment  of  the  note,  and  hold  the 
surplus  to  his  use  ;  he  pays  interest  from  time  to  time  upon  the  note 
after  it  had  fallen  due,  and  continues  to  receive  the  dividends  upon  the 
shares.  Held,  that  he  is  still  a  member  of  the  corporation.  Merchants 
Bank  V.  Cook,  4  Pick.  405. 

Collateral  Shares.  —  A  subscriber  for  90  bank  shares,  of  flOO  each, 
paid  $2,750  towards  an  instalment  of  80  percent.,  and  drew  a  draft  in 
favor  of  the  bank  for  the  balance,  and  transferred  to  the  bank  all  his 
right,  (tc,  in  his  shares,  (excepting  and  reserving  the  sum  he  had  paid 
in  money,)  as  collateral  security  for  payment  of  the  draft.  The  draft 
was  not  paid,  nor  did  the  bank  pass  to  the  subscriber's  credit  any  stock, 
nor  give  him  any  certificate  for  shares.  Held,  that  the  subscriber  was 
once  an  owner  of  the  shares,  and  that  the  effect  of  the  reservation  in  his 
conveyance  to  the  bank  was,  that  an  amount  equal  to  34  shares,  of  the 
par  value  of  $80  a  share,  remained  his  property,  and  was  liable  to  be 
sold  on  an  execution  against  him.  Hussey  v.  M.  and  M.  Bank.  10  Pick. 
415. 

The  application,  by  the  bank,  of  the  $2,750  to  an  account  of  the  sub- 
scriber, which  was  independent  of  the  shares,  was  held  to  be  unauthor- 
ized, and  not  to  affect  his  title  to  the  shares.     lb. 

Liability  for  Beficiency.  —  If  stockholders,  while  their  charter  is  m 
force  and  their  bills  in  free  circulation,  should  divide  and  withdraw 
their  capital,  so  that  their  debts  could  not  be  paid,  they  would  be  iiable 
to  the  person   thereby  injured.     Per  Jackson,  J.  15   Mass.  519.     Bu 


COURT    OF    MASSACHUSETTS.  IZiJ 

wlicre  the  capital  stock  of  a  bank  was  divided,  after  its  charter  had  ex- 
pired, so  that  fiiiuls  were  not  left  to  pay  its  debts,  it  was  lidd  that  an 
action  would  not  lie  against  an  individual  stockholder,  who  had  received 
his  proportion  of  the  dividends.  Vuse  v.  Grant,  15  Mass.  505.  Spear  v 
Grant,  16  Mass.  9. 

Actio7i  for  Fraud.  —  A  stockholder  may  sustain  a  bill  in  equity  against 
the  corporation,  the  directors,  and  other  stockholders,  on  allegation  of 
fraudulent  jjractices,  depreciating  the  value  of  the  stock,  suspending 
banking  operations,  refusing  cash  payments,  and  withholding  dividends  ; 
and  in  sudi  bill,  he  may  join  individual  stockholders  with  the  corpora- 
tion, may  pray  for  an  account  of  stock  and  funds,  and  for  restoration  of 
whatever  has  been  fraudulently  withdrawn  from  the  common  stock. 
Taylor  v.  Miami  Exporting  Co.,  5  Ham.  1(55.     See  15  Mass.  522. 

Liability  for  Circulation. — Where  a  bank  divided  among  its  stockhold- 
ers three  fourths  of  its  capital  stock,  before  its  charter  expired,  and  did 
not  provide  funds  adequate  to  meet  its  outslanding  notes,  it  was  held 
that  a  bill  in  equity  might  be  maintained  by  soine  of  the  holders  of  the 
notes  against  some  of  the  stockholders,  the  impossibility  of  bringing  all 
before  the  court  being  suthcient  to  dispense  with  the  ordinary  rule  of 
making  all  parties  in  interest  parties  to  the  suit.  Wood  v.  Bummer,  3 
Mason,  308. 

The  decree,  in  such  case,  against -the  stockholders  before  the  court, 
should  be  only  for  their  contributory  share  of  the  debt,  in  the  proportion 
which  their  stock  bore  to  the  whole.     lb. 

Where  the  charter  of  a  bank  makes  a  stockholder  personally  liable,  an 
action  of  debt  lies  against  him  by  the  holder  of  a  dishonored  bank  note. 
Bullard  v.  Bell,  1  Mason,  243. 


VI. BANKS,    BANKING,    FAILURE,    LIQUIDATION,   ETC. 

Assignment  of  Securities.  —  The  Massachusetts  statute  of  1812,  c.  57, 
which  prohibited  banks,  after  the  expiration  of  their  charters,  from  issu- 
ing or  putting  into  circulation  any  securities  for  money,  did  not  extend 
to  the  assignment  of  a  note  for  the  purpose  of  paying  a  debt  owed  by  the 
bank  before  the  charter  expired  ;  no  new  obligation  being  contracted  by 
the  bank.     Hallorvell,  <^c.  Bank  v.  Hamlin,  14  Mass.  178. 

Penalty  for  Suspension.  —  The  statute  of  1809,  c.  38,  imposing  (pro- 
spectively) a  penalty  of  two  per  cent,  a  month  on  the  amount  of  bank 
notes,  -which  the  bank  issuing  them  should  refuse  or  neglect  to  pay  on 
demand,  was  held  to  be  constitutional  and  valid.  Brown  v.  Penobscot 
Bank,  8  Mass.  445. 

Capital.  —  A  bank  incorporated  with  the  privilege  of  creating  a  stock 
not  less  than  one  sum,  nor  greater  than  another,  may  commence  busi- 


130  DECISIONS    OF    THE    SUPREME    JUDICIAL 

ness  with  the  smaller  capital    and  afterwards  increase  it  tc   the  largsr 
Grey  v.  rortland  Bank,  3  Mass.  364. 

Special  Deposits.  —  Where  gold  coins,  deposited  in  a  bank  for  safe- 
keeping, are  fraudulently  taken  away  by  the  cashier,  the  bank  is  not 
answerable  to  the  owner,  unless  gross  negligence  is  proved.  Foster  v. 
Essex  Bank,  17  Mass.  459. 

Where  the  officers  of  a  bank  have  been  in  the  practice  of  receiving 
money  and  other  things  to  be  deposited  in  its  vault  for  safe-keeping,  the 
corporation,  and  not  the  officers,  will  be  considered  as  the  depositary,    lb. 

Uncurrent  Notes.  —  A  bank  that  is  prohibited,  by  its  charter,  from 
vesting,  using,  or  improving  any  of  its  moneys,  goods,  &c.,  in  trade  or 
commerce,  may  nevertheless  lawfully  take  notes  payable  in  bills  of  other 
banks,  and  receive  such  bills  at  a  discount  in  payment  for  their  notes. 
Portland  Bank  v.  Storer,  7  Mass.  433. 

And  may  make  loans  in  their  own  bills,  on  a  contract  that  if  any  of 
the  bills  shall  be  returned  during  the  continuance  of  the  loan,  the  bor- 
rower shall  redeem  them  with  specie,  and  that  he  shall  also  receive  of 
the  bank  a  certain  amount  of  the  bills  of  other  banks,  for  which  he 
should  pay  specie.     Northampton  Bank  v.  Allen,  10  Mass.  284. 

Void  Loans.  —  The  Massachusetts  statute  of  1809,  c.  38,  (which  made 
penal  the  receiving  as  a  deposit,  or  in  other  way  negotiating,  loaning, 
or  passing  payment,  btj  any  banking  corporation,  of  the  bank  bills  or 
notes  of  any  banking  company  not  incorporated  by  the  Legislature  of 
Massachusetts,  except  the  bills  of  the  United  States  Bank,)  rendered 
void  any  note  made  payable  to  a  bank  in  such  prohibited  bills  ;  and  the 
subsequent  repeal  of  the  statute  did  not  purge  the  illegality  of  the  con- 
tract.    Springfield  Bank  v.  Merrick,  14  Mass.  322. 

Power  of  Directors.  —  The  directors  have  authority  to  control  all  the 
property  of  the  bank  ;  and  they  may  authorize  one  of  their  number  to 
assign  any  securities  belonging  to  the  corporation.  A  blank  endorse- 
ment, in  pursuance  of  such  authority,  by  the  person  so  atuhorized,  is 
sufficient  to  transfer  a  note  ;  and  the  endorsement  may  be  properly  filled 
at  the  bar.     11  Mass.  288. 

Custom.  —  Where  a  bank  has  established  usages  and  by-laws  respect 
ing  demands  on  makers  of  promissory  notes  and  notices  to  endorsers 
thereof,  the  dealings  and  contracts  of  persons  doing  business  with  such 
company  are  to  be  understood  and  enforced  according  to  such  usages 
and  by-laws.  Lincoln  and  Kennebec  Bank  v.  Page,  6  Mass.  125.  Same 
V.  Hammatt,  ib.  159.     Smith  v.  Whiting,  12  Mass.  8. 

The  usages  of  a  bank,  at  which  parties  are  accustomed  to  transact 
business,  concerning  demand  and  notice  on  notes,  &c.,  are  given  in  evi- 
dence, not  as  rules  of  judicial  decision,  but  as  evidence  of  the  contract 
of  the  parties,  and  their  assent  to  usages,  and  of  their  waiving  their 


COURT    OF    MASSACHUSETTS.  131 

Strictly  legal  claims.  lb.  Blanchard  v.  IlUUnrd,  11  Mass.  88.  Junes  v. 
Faks,  4  Mass.  252.  Widgery  v.  Monroe,  6  Ma^s.  4.50.  Rtnmr  v.  Bank 
of  Columbia,  9  Wheat.  585.  Yeaton  v.  Ba7ik  of  Alexandria,  5  Cranch,  52. 
Bank  of  Columbia  v.  Filzhugh,  1  Har.  &  Gill,  239.  Hartford  Batik  v. 
Stedman,  3  Conn.  489. 

In  Mills  V.  Bank  of  U.  S.,  11  Wheat.  431,  the  parties  were  not  ac- 
quainted with  the  usage  of  the  bank ;  but  as  the  note  was  made  paya- 
ble at  the  banif,  it  was  held  that  the  parties  were  bound  to  know  its 
usages,  and  had  impliedly  agreed  that  those  usages  should  become  a 
part  of  their  contract. 

And  this  doctrine  was  afterwards  held  to  be  applicable  to  the  parties 
to  a  bill  of  exchange  drawn  on  a  person  at  Washington,  on  the  ground 
that  the  bill  would  probably  be  put  into  bank  there  for  collection.  Bank 
of  Washington  v.  Triplett,  1  Pet.  25.  See,  also,  Whitrvell  v.  Johnson,  17 
Mass.  452. 

Bank  Notice.  —  So  an  established  custom  that  notice,  &c.,  to  directors 
of  a  bank  shall  be  lel't  on  the  cashier's  desk,  is  binding  on  the  directors 
whose  notes  come  into  the  bank.      Weld  v.  Gorham,  10  Mass.  366. 

So  of  a  custom  to  make  demand  of  the  maker  of  a  note  lodged  in  a 
bank,  without  presenting  the  note  to  him.  Whitmell  v.  Johnson,  17 
Mass.  452.  City  Bank  v.  Cutter,  3  Pick.  414.  S.  P.  Pearson  v.  Bank  of 
Metropolis,  1  Pet.  93.     Eahorg  v.  Bank  of  Columbia,  1  Har.  &  Gill,  231. 

In  all  these  cases,  a  knowledge,  express  or  implied,  of  the  usage, 
must  be  brought  home  to  the  party  who  is  to  be  affected  by  it.  Fierce 
V.  Butler,  14  Mass.  303.     11  Wheat.  431. 

Damages.  —  A  bank  is  liable  to  an  action  for  wrongfully  refusing  to 
transfer  shares  ;  and  the  measure  of  damages  is  the  value  of  the  shares 
at  the  time  of  the  refusal,  with  interest  to  the  time  of  the  rendition  of 
judgment.  Hussey  v.  M.  (^  M.  Bank,  10  Pick.  415.  See,  also,  10  Johns. 
485.     3  Mass.  364. 

Attachment  of  Shares.  —  Where  the  owner  of  shares  assigned  them  to 
two  persons,  and  gave  a  power  of  attorney  to  one  of  them  to  transfer 
them  on  the  books  of  the  bank,  the  power  was  held  to  be  valid,  whether 
the  power  authorized  the  transfer  to  be  made  to  both  assignees,  or  to 
the  attorney  alone  ;  and  the  bank  was  held  not  to  be  liable  for  refusing 
to  transfer  the  shares  to  a  subsequent  attaching  creditor,  who  sold  them 
on  execution.     Plymouth  Bank  v.  Bank  of  Norfolk,  10  Pick.  454. 

Exhibition  of  Books.  —  A  bank  is  bound  to  exhibit  its  books  to  a  de- 
positor, on  proper  occasions,  and  the  officers  having  charge  of  them  are^ 
quoad  hoc,  the  agents  of  both  parties.     Union  Bank  v.  lOiapp,  3  Pick.  96 

Payment  in  Suspended  Bills.  —  A  bank  is,  in  New  York,  legally  bound 
to  take  its  own  bills  in  payment  of  debts  due  to  it.     Per  Woodworth,  J 


13*i  DECISIONS    OF    THE    SUPREME    JUDICIAL 

Niagara  Bank  v.  Roosevelt,  9  Cow.  409.     Aliter,  ii.   Massachusetts.     13 
Mass.  206.     See,  also,  TUlou  v.  Britton,  4  Halst    l2(J 

In  Ohio,  if  a  bank  has  bona  fide  parted  with  all  interest  in  a  debt  due 
to  it,  the  debtor  cannot  pay  the  assignee  in  the  paper  of  the  bank.  Pan- 
coast  V.  Ruffin,  1  Ham.  381.  S.  P.  Hallowell,  4-t.  Bank  v.  Howard,  13 
Mass.  235. 

Tax  on  Stock.  —  The  Legislature  of  a  State  may  constitutionally  impose 
a  tax  on  the  capital  stock,  &c.,  of  a  bank  previously  incorporated  by  it, 
unless  the  right  has  been  expressly  relinquished.  Portland  Bank  v.  Ap- 
thorp,  12  ]\Iass.  252.  Provide7ice  Bank  v.  Billings,  4  Pet.  514.  Judson  v. 
State,  Minor,  150. 

Rights  of  Third  Parties  —  Collection  Paper.  —  When  there  have  been, 
for  several  years,  mutual  and  extensive  dealings  between  two  banks, 
and  an  account  current  kept  between  them,  in  which  they  mutually 
credited  each  other  with  the  proceeds  of  all  paper  remitted  for  collection, 
ivhen  received,  and  charged  all  costs  of  protests,  postage,  &c.;  accounts 
regularly  transmitted  from  the  one  to  the  other,  and  settled  upon  these 
principles ;  and  upon  the  face  of  the  paper  transmitted,  it  always  ap- 
peared to  be  the  property  of  the  respective  banks,  and  to  be  remitted  by 
each  of  them  upon  its  own  account ;  there  is  a  lien  for  a  general  bal- 
ance of  account  upon  the  paper  thus  transmitted,  no  matter  who  may 
be  its  real  owner.  New  England  Bank  v.  Bank  Metropolis,  Supreme 
Court  U.  S.  1  Howard,  234. 

A  bank  that  receives  from  another  bank,  for  collection,  a  note  en- 
dorsed by  the  cashier  of  that  bank,  is  bound  to  present  the  note  to  the 
maker  for  payment,  at  maturity,  and,  if  it  is  not  paid,  to  give  notice  of 
non-payment  to  the  bank  from  which  the  note  was  received ;  is  not 
bound,  unless  by  special  agreement,  to  give  such  notice  to  the  other  par- 
ties to  the  note.  Phipps  v.  Millbury  Bank,  8  Metcalfs  Massachusetts 
Reports,  p.  79. 

A  bank  receiving  paper  for  collection  at  Philadelphia,  or  elsewhere,  is 
liable  to  its  depositors  for  the  neglect  or  mistakes  of  its  correspondents 
in  protesting  paper,  or  in  placing  notes,  &c.,  in  the  hands  of  notaries 
for  protest.  Ballister  v.  Farmers'  (f  3Iech.  Bank,  Phil.  (Before  the  Court 
of  Common  Pleas,  Boston,  Feb.  1846,  for  collection  paper  remitted  by 
State  Bank,  Boston.  For  full  report  of  this  case,  see  Bankers'  Maga- 
zine, vol.  1,  pp.  13,  14.) 

Injunction.  —  A  party  who  brings  an  action  against  a  bank,  that  is 
afterwards  restrained,  by  injunction,  from  further  proceeding  in  its  busi- 
ness,  and  whose  property  and  effects  are  put  into  the  hands  of  receivers, 
does  not,  by  proving  his  claim  before  the  receivers,  but  without  receiv- 
ing a  certificate  thereof,  or  taking  a  dividend,  bar  his  right  to  proceed  io 
the  action.      Watson  v.  Phenix  Bank,  8  Metcalfs  Mass.  Reports. 


COURT    OF    MASSACHUSETTS,  135 

In  a  suit  on  a  demand  due  from  a  bank,  the  plaintiff  is  entitled  to 
recover  interest  thereon  from  the  time  of  action  brought,  although  tiie 
bank  is  afterwards  restrained,  by  injunction,  from  proceeding  in  its 
business,  and  its  property  is  put  into  the  hands  of  receivers.     lb. 

Attachment.  —  The  Bank  of  Michigan  placed  funds  in  the  hands  of  W. 
&  Co.,  in  New  York,  for  the  special  purpose  of  paying  its  drafts  made 
in  favor  of  various  individuals,  and  not  then  due  and  payable ;  and 
afterwards  drew  an  order  on  W.  &  Co.,  in  favor  of  D.,  of  Springfield,  for 
the  amount  of  said  funds,  and  desired  D.  to  make  arrangement  with  W. 
&  Co.,  to  provide  for  the  payment  of  said  drafts,  so  far  as  the  funds 
should  be  sufhcient  therefor;  and  W.  &  Co.  placed  said  funds  on  their 
books  to  the  credit  of  D.,  who  instructed  them  to  pay  the  drafts  as  they 
should  be  presented  at  maturity  ;  the  holders  of  the  drafts  had  notice 
that  said  funds  were  placed  at  D.'s  control  for  payment  of  their  claims, 
and  assented  thereto,  and  D.  had  notice  of  this  assent  ;  a  creditor  of  the 
bank,  residing  in  this  state,  afterwards  sued  the  bank  here,  and  attached 
said  funds  in  D.'s  hands,  by  the  trustee  process.  Held,  that  the  process 
could  not  be  maintained  against  D.  Edmund  Dwight  v.  Bank  of  Michi- 
gan, vol.  10,  Metcalf's  Massachusetts  Supreme  Court  Reports,  p.  605.  • 

Liquidation  by  Receivers.  —  In  adjusting  the  concerns  of  a  bank,  by 
receivers  of  its  assets  appointed  pursuant  to  the  provisions  of  Statutes, 
the  bank  tax  imposed  by  Revised  Statutes,  c.  9  and  36,  and  due  from 
the  bank,  may  be  set  off  against  money  due  from  the  Commonwealth  to 
the  bank  on  loan  :  so,  of  money  deposited  in  the  bank  by  the  agent  of 
Charles  River  Bridge,  in  his  capacity  as  agent,  —  aliter,  of  money  de- 
posited in  the  bank  by  the  warden  of  the  State  Prison,  in  his  capacity 
of  warden.     11  Metcalf. 

Insolvent  Banh.  —  An  incorporated  bank  is  not  a  person  within  the 
meaning  of  the  act  of  Congress,  (1797,)  which  requires  priority  of  pay- 
ment to  be  made  to  the  United  States,  when  any  person  indebted  to 
them  shall  become  insolvent,  not  having  sufficient  property  to  pay  all 
his  debts,  or  shall  make  a  voluntary  assignment  of  his  property ;  or 
when  his  property  shall  be  attached  by  process  against  an  absconding, 
concealed,  or  absent  debtor,  or  when  a  legal  act  of  bankruptcy  shall  be 
committed  by  him. 

When  the  assets  of  a  bank  are  put  into  the  hands  of  receivers,  pursu- 
ant to  statute  of  1838,  to  have  its  concerns  adjusted  according  to  the 
provisions  of  Revised  Statutes,  c.  44,  the  United  States,  if  creditors  of 
the  bank,  are  not  entitled  to  priority  of  payment,  under  the  act  of  Con- 
gress of  1797,  there  not  being,  in  that  case,  such  an  insolvency  of  their 
debtor  as  is  contemplated  by  that  act.  Commonwealth  v.  Phanix  Bank 
ibid.  p.  129. 

Agency.  —  Collection  of  Taper.  —  An  agent  has  no  right  to  delegate 
12 


134  DECISIONS    OF    THE    SUPllEME    JUDICIAL 

his  authority  to  a  sub-agent,  without  the  assent  'of  his  principal ;  but 
where,  from  the  nature  of  the  agency,  a  sub-agent  must  necessarily  be 
employed,  the  assent  of  the  principal  must  be  obtained  j  as,  where  a 
draft,  payable  at  a  distant  place,  is  left  with  a  bank  for  collection,  it 
must  be  presumed  that  it  is  intended  to  be  transmitted  to  a  sub-agent, 
at  the  place  where  it  is  payable,  and  not  that  the  bank  is  to  employ  its 
own  officers  to  proceed  there,  for  the  purpose  of  obtaining  payment. 
Dorchester  and  Milton  Bank  v.  Nerv  England  Bank,  1  Gushing,  177. 

A  bank,  by  which  notes  and  bills,  payable  at  a  distant  place,  are  re 
ceived  for  collection,  without  specific  instructions,  is  bound  to  transmit 
or  to  cause  the  same  to  be  transmitted,  by  suitable  sub-agents,  to  some 
suitable  bank,  or  other  agent,  at  the  place  of  payment,  for  that  purpose  ; 
and  where  suitable  sub-agents  are  thus  employed,  in  good  faith,  the 
collecting  bank  is  not  liable  for  their  neglect  or  default.     lb. 

The  D.  and  M.  Bank,  at  M.,  having  discounted  a  number  of  drafts, 
payable  in  W.,  transferred  the  same,  by  a  general  endorsement,  and 
without  any  specific  instructions,  to  the  N.  E.  Bank,  in  Boston,  their 
general  agents  for  collection  :  the  latter,  having  no  correspondent  in  W., 
transferred  the  drafts,  by  a  like  general  endorsement,  to  the  C.  Bank,  in 
Boston,  then  and  afterwards  in  good  credit,  for  collection  ;  the  C.  Bank 
transmitted  the  drafts  to  :heir  correspondent,  the  Bank  of  the  RI.,  in  W., 
for  the  same  purpose  :  tlie  C.  Bank  having  subsequently  failed,  the  N. 
E.  Bank  demanded  the  drafts  of  the  B.  of  the  I\I.  before  they  became 
due  :  the  latter  refused  to  deliver  the  drafts,  but  collected  them,  and  ap 
plied  the  proceeds  to  the  payment  of  a  balance  due  them  from  the  C. 
Bank;  whereupon  the  N.  E.  Bank  commenced  an  action  against  the 
Bank  of  the  M.  to  recover  the  amount :  — it  was  held,  1st,  that  the  N. 
E.  Bank,  having  acted  in  good  faith,  and  the  C.  Bank  being  a  suitable 
agent,  had  authority  to  employ  the  latter  to  make  the  collection ;  2d, 
that  no  proof  of  general  usage  was  necessary  to  give  the  N.  E.  Bank 
such  authority ;  and,  3d,  that,  as  the  drafts  were  transferred  to  the  N. 
E.  Bank  by  a  general  endorsement,  that  bank  might  transfer  them  in 
the  same  manner  to  the  C.  Bank,  and  were  not  bound  to  make  a  re- 
stricted endorsement.     lb. 

Loans —  Collateral,  (f-c.  —  The  agent  of  the  H.  M.  Co.,  at  Ware,  being 
authorized  for  the  purpose  by  a  vote  of  the  corporation,  made  drafts  on 
D.  B.  &:  Co.,  of  New  York,  payable  to  the  order  of  G.  S.,  treasurer  of  the 
company,  and  one  of  the  firm  of  G.  S.  &  Co.,  the  agents  of  the  company 
in  Boston,  which  drafts  were  there  accepted  by  D.,  one  of  the  drawees, 
who  was  also  a  member  of  the  firm  of  G.  S.  &:  Co.,  and  were  then 
endorsed  by  G.  S.,  treasurer,  and  by  G.  S.  &  Co.,  and  negotiated  and 
disposed  of  by  them  for  their  own  benefit,  under  an  agreement  with  the 
H.  M.  Co.  that  they  would  pay  them  at  maturity:  G.  S.  &  Co.,  hav 
ing  failed  before  tlie  drafts  became  due,  and  being  unable  to  take  them 


COURT    OF    MASSACHUSETTS.  135 

up  at  maturity,  the  drafts,  when  due,  were  proved  and  allowed  as 
claims  against  the  H.  M.  Co.,  who  had  also  tailed  in  the  mean  time, 
and  dividends  were  paid  thereon  by  the  assignees  of  the  latter  :  — it  was 
held,  that  the  assignees  of  the  H.  M.  Co.  were  entitled  to  charge  the 
amount  of  said  drafts  against  G.  S.  &c  Co.  in  account  :  notwithstanding 
that,  on  some  of  them,  the  endorsement  of  G.  S.,  treasurer,  was  made 
by  attorney  ; — that  some  of  them  were  paid  by  one  of  the  endorsers, 
subsequent  to  G.  S.  &  Co.,  without  previous  demand  of  the  acceptor, 
and  notice  to  such  endorser  ;  —  and  that  some  of  them  had  been  nego 
tiated  and  received  in  payment  of,  or  as  collateral  security  for,  illegal 
loans.     Sha7v  v.  Stone,  228. 

Endorsement.  —  A  draft,  by  the  agent  of  a  corporation,  payable  to  "  G 
S.,  treasurer"  thereof,  is  payable  to  him  personally,  though  described 
as  treasurei,  and  not  merely  as  treasurer  for  the  time  being,  and  may 
be  endorsed  by  him,  as  treasurer,  either  in  person,  or  by  attorney.     lb. 

Bond.  —  A  bond  well  and  truly  to  execute  the  duties  of  cashier  or  tel- 
ler, includes  not  only  honesty,  but  reasonable  skill  and  diligence.  If, 
therefore,  he  perform  those  duties  negligently  and  unskilfully,  or  if  he 
violate  them  from  want  of  capacity  and  care,  the  condition  of  his  bond 
is  broken,  and  his  sureties  are  liable  for  his  misdoings.  Minor  v.  Me- 
chanics' Bank,  1  Pet.  46.  State  Bank  v.  Chetwoud,  3  Halst.  25.  Barring- 
ton  V.  Bank  of  Washington,  14  S.  &  R.  405.  American  Bank  v.  Adams, 
12  Pickering,  303. 

Collateral  Stock.  —  A  bank  cannot  legally  be  taxed  for  railroad  stock 
pledged  to  it  as  collateral  security  for  a  debt.  Waltham  Bank  v.  Inhabi- 
tants of  Waltham,  Metcalfs  Reports,  vol.  x.,  334. 

Individual  Linhility.  —  Under  the  Rev.  Sts.  c.  3(5,  ^  31,  which  provide 
that  "  the  holders  of  stock  in  any  bank,  at  the  time  when  its  charter 
shall  expire,  shall  be  liable,  in  their  individual  capacities,  for  the  pay- 
ment and  redemption  of  all  bills  which  may  have  been  issued  by  said 
bank,  and  which  shall  remain  unpaid,  in  proportion  to  the  stock  they 
may  respectively  hold  at  the  dissolution  of  the  charter,"  it  was  held, 
that  the  bill-holders  cannot  severally  maintain  a  bill  in  equity  ag.umst 
the  stockholders,  to  compel  payment  and  redemption  of  the  unpaid  bills 
held  by  them  respectively,  but  that  all  of  them  must  join  in  one  bill,  or 
one  or  more  of  them  must  file  a  bill  for  the  benefit  of  all,  against  all  the 
stockholders.  Crease  v.  Babcock,  ibid.  525.  [Case  of  the  Chelsea  Bank.] 
Grew  V.  Breed,  ibid.  575. 

Unpaid  Bills.  —  Held,  also,  that  a  holder  of  bank  bills,  purchased  by 
him  as  trustee,  is  entitled  to  maintain  a  bill  in  equity  in  his  own  nanie, 
without  joining  the  cestui  que  trust,  against  the  stockholders,  for  him 
self,  and  for  all  other  holders  of  unpaid  bills.  Grerv  v.  Breed,  ibid.  569 
[Case  of  the  Nahant  Bank.] 


136  DECISIONS    OF    S.    J.    COURT    OF    MASSACHUSETTS. 

Held,  also,  that  one  who  buys  bank  bills  of  a  broker,  at  a  discount, 
Gnder  an  agreement  to  keep  them  from  circulation  for  a  ctitain  time,  is 
entitled  to  the  statute  remedy  against  the  stockholders^  for  the  full 
amount  of  the  bills,  unless  he  has  notice,  when  he  buys  them,  that  they 
are  improperly  issued  by  the  ofificers  of  the  bank ;  but  that  such  a  sale 
to  him  by  a  broker  is  not  evidence  of  such  notice.     Ibid. 

Held,  also,  that  when  the  bills  of  the  bank  are  sold  by  its  officers,  on 
a  usurious  contract,  a  subsequent  bona  fide  purchaser  of  them  is  en- 
titled to  recover  of  the  stockholders  the  full  nominal  value  thereof,  with- 
out any  deduction  on  account  of  the  usury  in  the  sale  by  the  officers  of 
the  bank.     Ibid. 

Held,  also,  that  an  agreement  by  a  bank,  with  a  holder  of  its  bills,  to 
convey  property  to  him  in  pajment  thereof,  which  agreement  is  not 
executed,  by  reason  of  an  injunction  on  the  bank  and  the  placing  of  its 
assets  in  the  hands  of  receivers,  does  not  impair  the  bill-holder's  remedy 
against  the  stockholders.     Ibid. 

Held,  also,  that  when  part  of  the  stock  is  owned  by  the  bank  itself,  the 
individual  stockholders  are  not,  for  that  reason,  liable  to  any  further  ex- 
tent than  they  would  have  been  if  none  of  the  stock  had  been  so  owned. 
Crease  v.  Babcock,  ibid.  525. 

Held,  also,  that  holders  of  stock  are  not  jointly  responsible  for  each 
other ;  that  each  is  severally  liable  in  such  a  sum,  not  exceeding  the  par 
value  of  his  shares,  as  the  amount  of  unpaid  bills  may  require  ;  and  that 
the  liability  of  solvent  holders  cannot  be  extended  by  reason  of  the 
insolvency  of  other  holcKrs.     Ibid. 

Held,  also,  that  those  M-ho  hold  stock  as  collateral  security,  and  those 
who  hold  it  in  trust,  whether  the  trust  does  or  does  not  appear  on  the 
books  of  the  bank,  are  liable  for  the  payment  and  redemption  of  unpaid 
bills  ;  and  that  administrators  of  deceased  stockholders  are  so  liable,  in 
their  representative  capacity,  as  for  other  debts  of  their  intestates. 
Crease  v.  Babcock,  ibid.  525.     Chew  v.  Breed,  569. 

Held,  also,  that  the  remedy  against  the  individual  stockholders  is  not 
confined  to  those  who  held  the  bills  of  the  bank  at  the  time  when  the 
charter  expired,  but  extends  to  those  who,  after  the  charter  expired,  took 
the  bills  in  the  ordinary  course  of  business,  or  otherwise  acquired  a  good 
title  to  them.     Ibid. 

Held,  also,  that  the  terms  "  bills  which  shall  remain  unpaid"  mean 
bills  that  shall  be  ultimately  unpaid,  after  the  application  of  the  assets 
of  the  bank  towards  payment  thereof,  and  that  the  holders  of  unpaid 
bills  are  not  entitled  to  a  decree  for  payment,  against  the  individual 
stockholders,  until  after  the  assets  of  the  bank  have  been  so  applied. 
Crease  v.  Babcock,  ibid.  525. 

Held,  also,  that  stockholders  are  not  liable  to  pay  post-notes  issued  by 
the  bank.     Crease  v.  Babcock,  ibid.  525. 


BANK    LAWS    OF    MASSACHUSETTS.  137 

Held,  also,  that  when  the  assets  of  the  bank  are  placed  in  the  hands 
of  receivers,  the  holders  of  its  bills,  who  do  not  present  their  claims  to  the 
receiver,  cannot  recover  of  stockholders  the  full  amount  thereof,  but  only 
the  balance  which  they  would  have  been  entitled  to  recover,  if  they  had 
proved  their  claims  before  the  receivers  had  obtained  part  payment. 
Grew  v.  Breed,  ibid.  569. 

Held,  also,  that  holders  of  stock  are  not  liable  to  pay  any  interest  on 
unpaid  bank  bills,  either  from  the  time  when  payment  was  demanded 
of  the  bank,  or  the  time  of  filing  a  bill  in  equity  to  compel  payment. 
Crease  v.  Babcock,  ibid.  525.     Grerv  v.  Breed. 

Held,  also,  that  an  attachment  of  the  property  of  the  bank,  made  on  a 
bill  in  equity  (inserted  in  a  writ)  by  the  holders  of  unpaid  bills  against 
the  individual  stockholders,  is  wholly  unavailing.  Crease  v.  Babcock, 
ibid.  525. 

Bill  of  Exchange. — An  acceptor  of  a  bill  of  exchange  is  not  liable  to  the 
payee  or  endorsee  for  damages  caused  by  non-payment,  but  only  for  the 
amount  of  the  bill,  with  interest  and  costs  of  protest.  Bonen  v.  Stod- 
dard, ibid.  375. 

The  statute  of  Maine,  which  enacts  that,  in  an  action  on  a  bill  of  ex- 
change drawn  or  endorsed  in  that  State,  payable  in  this  State,  and  pro- 
tested for  non-payment,  the  holder  shall  recover  three  per  cent,  damages, 
in  addition  to  the  contents  of  the  bill  and  interest,  does  not  entitle  the 
holder  to  recover  those  damages  in  a  suit  brought  agai?  t  the  acceptor 
io  the  courts  of  this  State.      Fiske  v.  Foster,  ibid.  597. 

12* 


ON    THE 

DUTIES,  OMISSIONS,  AND  MISDOINGS 

OP 

BANK     DIRECTORS. 

BY  A.    B.    JOHNSON. 


TO  THE  HON.  JOHN  GREIG,  OF  CANANDAIGUA,  VICE  CHANCELLOR  OF  THE 
STATE  UNIVERSITY,  AND  PRESIDENT  OF  THE  ONTARIO  BANK. 

Mt  Deak  Sik: — The  following  reflections,  you,  of  all  men,  need  the  least,  still  I  ia- 
Bcribe  them  to  you,  for  you  have  been  in  my  thoughts  whenever  I  have  spoken  of 
conduct  commendable  in  a  bank  director.  Indeed,  your  entire  Board  are  models  of 
what  bank  directors  should  be,  no  member  of  your  direction,  and  no  officer  of  your 
bank,  having  been,  for  many  years,  its  debtor,  in  any  shape ;  while  you,  and  all  the 
directors  have  performed  faithfully  your  duties,  with  no  pecuniary  consideration,  ex- 
cept what  proceeds  from  the  bank  dividends,  which  are  shared  in  common  by  all  the 
stockholders.  Though  I  have  been  an  officer  of  your  corporation  for  nearly  the  third 
of  a  century,  I  never  saw  your  Board  but  once — the  fsUl  of  18-13 — and  then  I  saw  the 
same  men,  to  a  great  extent,  who,  thirty  years  previously,  in  the  same  chamber,  and 
around  the  same  table,  commenced  banking.  The  Board  had  met  to  discharge  a 
pleasant  duty,  in  dividing  among  the  stockholders,  out  of  surplus  profits  that  had  been 
earned  at  the  Canandaigua  office,  20  per  cent,  on  the  invested  capital  of  half  a  milliou 
of  dollars.  To  say  that  no  director,  and  no  officer  of  the  bank  had  purchased  up  stock 
in  anticipation  of  this  great  and  unexpected  dividend,  is  only  what  is  known  to  every- 
body ;  and  what  has  passed  unnoted  by  everybody,  for  the  reason  that  no  different 
conduct  could  be  expected  from  the  actors.  Indeed,  in  alluding  to  it  now,  I  hesitate, 
as  a  man  falters  in  naming  a  disreputable  woman  in  the  hearing  of  chaste  matrons 
V)ut  I  can  not  avoid  knowing  that  tlie  conduct  of  your  Board,  in  this  particular,  con» 
trasts  gratefully  with  the  spasmodic  rise  in  price  which  occasionally  occurs  in  the 
luoted  stocks  of  some  prosperous  corporations ;  and  which  rise  reveals,  to  a  practical 
observer,  that  the  directors  are  competing  with  each  other  for  the  stock,  in  anticipation 
*f  a  secret  forthcoming  surplus  dividend. 

Eight  more  years  are  passed  since  the  event  referred  to,  and  you  are  still  President 
4t  the  same  Board,  with  the  sams  Midas  in  cliarge  of  the  executive  department  of  the 
bank ,  and  he  is  again  amassing  surplus  profits,  which,  on  the  first  day  of  Jaruary, 
1S56,  -ifhen  the  bank  is  to  die  a  natural  death,  will  be  again  faithfully  given  to  the 
Btockholclers.  That  the  same  Board  may  survive,  with  strength  and  heaUh,  to  that 
ultimate  consummation  of  all  banking  tilings  to  you,  and  them,  and  me,  devoutly 
prays 

Your  friend  during  more  than  eight  lusters, 

A.  B.  JOHNSON. 

Utioa,  April  Ut,  1851. 


DUTIES    OF    BANKERS.  139 

Who  are  Bank  Directors  f — In  the  year  1829,  the  State  of  New  York, 
to  protect  the  publie  against  bank  insolvencies,  originated  tlie  Safety 
Fund  System  of  banking,  by  which  every  bank  subject  thereto,  was  com- 
pelled to  pay  annually  into  the  State  Treasury  the  half  of  1  per  cent,  on  its 
capital,  till  the  payments  should  amount  to  3  per  cent,  thereon ;  paymenta 
were  then  to  be  intermitted,  till  the  fund  should  become  exhausted  by 
losses,  when  a  further  3  per  cent.  Avas  to  be  collected  by  processes  similar 
to  the  first.  Soon  after  the  year  1836,  several  Safety  Fund  banks  became 
insolvent,  absorbing,  by  means  of  various  frauds,  not  only  the  existing  col- 
lections of  the  Safety  Fund,  but  all  the  annual  payments  that  would  be 
made  by  solvent  banks  during  the  limit  of  their  corporate  existence. 

Influenced  by  this  sad  aspect  of  an  experiment  which  had  lived  down 
its  original  many  enemies,  the  State,  in  the  year  1838,  discontinued  the 
further  creation  of  Safety  Fund  bank  charters,  and  originated  what  are 
called  Free  Banks ;  voluntary  associations,  whose  bank-notes  are  secured 
by  pledges  to  the  State  of  certain  governmental  stocks  (State  and  National), 
or  by  such  stocks,  and  by  mortgages  on  unincumbered  real  estate,  in  equal 
parts  each.  Our  purpose  includes  not  the  comparative  merits  of  the  sys- 
tems, or  the  positive  merit  of  either.  So  for  as  the  banks  of  both  systems 
are  managed  by  directors,  they  will  be  within  the  purvieu  of  our  remarks; 
but  the  Safety  Fund  Banks  are  subjected  by  their  charters  to  a  board  of 
twelve  or  thirteen  directors,  while  the  Free  Banks  may  adopt  any  number, 
or  any  other  mode  of  government  which  the  proprietors  shall  prefer,  hence 
the  proprietors,  in  some  cases,  constitute  a  pecuniary  democracy,  governing 
personally,  and  to  such  the  following  treatise  will  be  inapplicable:  — 

THE   DUTIES   OF   BANK   DIRECTORS. 

A  Director  should  possess  a  good  Tlieory  of  Conduct. — Bank  direc- 
tors usually  commence  their  duties  with  honest  intentions  toward  their 
stockholders  and  the  public.  The  misconduct  which  may  supervene,  will 
proceed  from  temptations  incident  to  their  office,  and  perhaps  from  the 
absence  of  well-digested  notions  of  the  conduct  that  is  proper.  To  remedy 
this  defect,  the  present  miniature  treatise  is  oQered,  and  its  good  intention 
is  avowed  as  a  palUative  for  its  presumption.  Some  years  ago,  a  person 
Wiis  asked  whether  he  would  accept  the  office  of  director  then  vacant  in  a 
bank  of  this  city.  After  deliberating,  he  replied,  that  as  the  office  might 
result  in  some  benefit  to  him,  he  would  accept.  When  the  answer  was 
reported  to  the  Board  who  were  to  till  the  vacancy,  they  refused  to  appoint 
him,  lest  he  should  sit  at  the  Board  mousing  to  catch  something  beneficial 
to  liimself,  while  they  wanted  a  director  who  would  accept  office  to  benefit 
the  bank.  A  man  ought  to  watch  his  own  interest,  when  conducting  his 
own  aff'airs,  but  when  he  is  acting  officially,  he  should  lose  himself  in  his 
public  duties.  We  expect  a  soldier  to  sacritice  his  Ufe,  if  necessary,  to  the 
discharge  of  his  duty,  and  we  should  condemn  him  for  professing  a  less 


140  DUTIES    OF    BANKERS. 

self-denying  creed,  how  much  soever  our  knowledge  of  human  fallibility 
might  induce  us  to  pardon  his  short-comings,  when  death  should  obstruct 
his  path.  Fortunately  the  performance  of  bank  duties  will  peril  only  some 
forbearance  from  pecuniary  acquisitions,  and  our  creed  ought  to  be  self- 
denying  enough  to  renounce  these,  instead  of  avowing  them  to  be  the  mo- 
tive of  our  services ;  nor  is  the  principle  new.  The  law  will  not  permit  a 
trustee  to  derive  any  indirect  benefit  from  his  trust,  or  any  judge  or  juror 
to  decide  in  his  own  controversies ;  and  the  State  of  New  York  ha.s,  in  its 
Constitution,  consecrated  the  principle,  by  prohibiting  our  legislators  from 
regulating  their  own  compensation,  or  even  the  number  of  days  which 
shall  be  occupied  in  legislative  duties.  In  some  cities,  also,  no  civic  officer 
can  become  legally  interested  in  any  municipal  contract ;  and  who  censures 
not  some  recent  high  officers  of  our  National  Government,  for  participating 
in  a  private  claim,  which  they  officially  aided  in  adjusting  and  paying. 
Thus  thinking,  the  President  of  a  large  railroad  corporation  of  our  State 
refused  to  supply  iron  for  his  road,  though  his  associate  directors,  with  the 
complaisance  which  is  as  vicious  as  it  is  common,  offered  him  the  contract. 
Ib  this  case,  no  contractor  could  have  been  more  eligible,  but  the  rejector 
established  a  precedent  that  is  more  profitable  for  his  corporation  than  the 
money  it  would  have  saved  in  purchasing  the  iron  of  him. 

Direct  Compensation  to  Directors  is  purer  than  Indirect. — The  re- 
muneration of  bank  directors,  consists,  with  us,  in  an  indefinite  claim  for 
bank  loans,  and  which  claim  led  formerly  to  so  great  an  absorption  of  the 
country  banks,  whoso  capitals  are  small,  that  a  law  was  enacted  interdict- 
ing bank  directors*  from  engrossing,  directly  or  mdlrectly,  more  than  a 
third  part  of  the  capital  of  their  respective  banks ;  a  quota  wliich  is,  in  some 
banks,  divided  equally  among  the  directors,  irrespective  of  any  business 
merits  of  the  borrower.  This  mode  of  compensation,  when  founded  on 
ample  security  for  the  borrowed  money,  and  when  the  amount  taken, 
directly  or  indirectly,  is  limited  to  the  legal  quota,  may,  in  small  banks, 
constitute  a  less  objectionable  mode  of  remunerating  directors  than  any 
other  indirect  mode,  or  than  most  other  direct  modes.  The  Legislature, 
however,  seems  to  have  contemplated  that  the  motives  for  accepting  a  di- 
rectorship shall  consist  in  being  a  stockholder,  and  thereby  a  participant  in 
the  general  profits  of  the  bank.  We  infer  this  from  the  requirements  of 
law,  that  the  director  of  every  bank  shall  own  at  least  five  hundred  dollars 
of  its  capital;  divesting  himself  of  which  causes  a  forfeiture  of  his  office. 
No  mode  of  compensation  is  so  pure  as  what  pr6ceeds  thus  from  a  ratable 
interest  in  the  common  loss  and  gains  of  a  bank ;  and  should  a  negation  of 
other  compensation  deter  small  stockholders  from  accepting  a  bank  direc- 

*  This  law,  like  most  other  lop.il  resiilations  of  bank  directors,  w.is  made  before  the 
CTiBiecce  of  banking  associatlous ;  hence  the  directors  of  such  associations  are  not 
lucli'ded  therein. 


DUTIES    OF    BANKERS.  141 

torhhip,  large  stockholders  could  be  substituted,  and  banks  would  thereby 
become  assimilated  to  private  institutions  that  are  managed  by  their 
owners — the  most  efficient  and  honest  of  all  manaf^ement.  A  man  may, 
however,  properly  refuse  the  office  of  bank  director,  unless  he  can  obtain 
for  his  services  a  satisfactory  pecuniary  compensation ;  and  banks  must 
comply  with  such  a  requirement,  if  suitable  men  are  not  otherwise  ob- 
tainable ;  but  such  a  contingency  promises  to  be  remote,  under  the  avidity 
for  accidental  distinctions  by  our  citizens,  consequent,  probably,  on  their 
legal  equality.  But  when  such  a  contingency  shall  occur,  a  direct  com- 
pensation will  generally  be  purer  than  any  indirect,  and  a  definite  compen- 
sation cheaper  than  an  indefinite  ;  and  usually  money  is  the  most  economi- 
cal mode  of  paying  for  services  that  are  not  to  be  deemed  honorary. 

No  Director  should  assume  Antagonistic  Duties. — The  law  usually  re- 
gards bank  directors  as  an  entirety  under  the  title  of  a  Board.  The  duties 
and  powers  which  are  conferred  on  the  Board  by  the  charters  of  Safety 
Fund  Banks,  may  be  classed  as  legislative,  supervisory,  and  appointing. 
The  legislative  power  consists  in  creating  such  offices  as  the  business  of 
the  bank  shall  render  necessary,  regulating  their  duties  and  salaries ;  di- 
recting the  modes  in  which  the  bank  shall  be  conducted,  and  generally  all 
that  pertains  to  the  management  of  the  stock,  property,  and  effects  of  the 
corporation.  The  appointing  power  consists  in  selecting  proper  incum- 
bents for  the  created  offices ;  while  the  supervisory  power  is  indicated  by 
all  the  foregoing,  and  by  the  ability  to  dismiss  the  appointees  at  pleasure. 
But  a  man  can  not  properly  supervise  himself  in  the  performance  of  public 
services,  nor  limit  and  regulate  their  scope  and  extent,  nor  fix  his  compen- 
sation therefor ;  hence  the  powers  of  the  Board  can  be  exercised  efficiently 
only  on  persons  who  are  not  members  of  the  Board.  Nor  is  the  inexpe- 
diency of  uniting  in  the  same  person  the  duties  of  grantor  and  grantee, 
master  and  servant,  agent  and  principal,  a  contrivance  of  man;  it  proceeds 
from  his  organization.  No  person  can  sit  at  a  Board  of  Directors  without  • 
observing  that  agents  who  are  not  directors,  are  supervised  more  freely  than 
agents  who  are  directors.  A  practical  admission  of  this  is  evinced  by  some 
discount  Boards,  who,  in  deciding  on  paper  oflered  by  directors,  vote  by  a 
species  of  ballot,  while  in  other  Boards,  the  offered  notes  are  passed  under 
the  table,  from  seat  to  seat;  and  a  note  is  deemed  rejected,  ifj  in  its  transit, 
some  director  has  secretly  folded  down  one  of  its  corners.  Had  the  United 
States  Bank  been  supervised  by  a  Board  disconnected  from  executive 
duties,  it  would  not  have  permitted  its  chief  officer  to  persevere  in  the 
measures  which  ultimately  ruined  the  corporation,  though  its  capital  was 
thirty-five  millions  of  dollars.  Even  the  separation  o  a  Legislature  into 
two  chambers,  checks  the  e-sprit  du  corps,  and  pride  of  opinion  which 
would  iirge  one  chamber  into  extremes,  with  no  means  of  extrication  from 
a  false  position.     A  separation  operates  hke  the  break  of  continuity  in  an 


142  DUTIES    OF    BANKKRS. 

electric  telegraph,  arresting  a  common  sympathy,  passion,  or  prejudice, 
which,  in  a  single  chamber,  rushes  iiTosistibly  to  its  object.  Still,  in  many 
Oanks  (the  Bank  of  England  included),  the  President  (ei^ulled  Governor  in 
the  Bank  of  England)  is  the  chief  executive  officer,  as  well  as  head  of  the 
legislative  department.  The  Bank  of  England  is,  however,  controlled  by 
twenty-four  directors,  the  largeness  of  which  number  naturally  mitigates 
the  influence  of  the  members  individuallj^,  and  hence  diminishes  ratably 
the  objection  against  its  executive  organization.  Such  an  organization 
may  operate  well,  where  the  Board  consists  of  a  small  number  of  members, 
yet  the  good  is  not  a  consequence  of  the  organization,  but  in  despite 
thereof;  for  whatever  weakens  the  power  of  supervision,  must  diminish  it* 
benefits.  The  joint  stock  banks  of  England  are  all  controlled  by  officers 
called  Managers,  and  who  are  not  members  of  the  Board,  though  they  sit 
thereat  ex  officio,  for  mutual  exjilanation  and  instruction. 

Tlie  Executive  should  be  Single,  not  Multiform. — That  the  Board  should 
legislate,  supervise,  and  appoint,  but  not  execute,  occasioned  proba- 
bly the  exclusion  from  the  directorship  that  early  prevailed,  and  widely 
continues,  of  the  person  who  occupies  the  office  of  cashier,  and  who,  with 
us,  was  once  almost  universally  the  chief  executive  bank  officer.  But  the 
executive  power,  located,  should  center  in  only  one  person ;  a  divided  re- 
sponsibility creating  necessarily  a  divided  vigilance.  Thirteen  men  acting 
as  an  executive,  will  not  produce  the  vigilance  of  one  man  ;nultiplied  by 
thiiteen;  but  rather  the  vigilance  of  one  man  divided  by  thirteen.  The  in- 
spection of  a  picture  by  ten  thousand  promiscuous  men  wLU  not  detect  as 
many  imperfections  in  it  as  the  scrutiny  of  one  person,  intent  on  discover- 
ing to  the  extent  of  his  utmost  vigilance;  hence  large  assemblies  refer 
every  investigation  to  a  small  committee,  the  chairman  of  wliich  is  expected 
to  assume  the  responsibility  of  the  examination,  while  the  other  members 
are  more  supervisors  than  actors.  Here  again,  as  in  most  other  modes 
which  business  assumes  by  chance  apparently,  our  organization  dictates 
the  mode.  When,  therefore,  we  want  an  army  of  the  highest  efficiency, 
we  possess  no  alternative  but  to  intrust  it  to  a  single  commander-in-chief; 
and  if  we  want  a  bank  of  the  highest  efficiency,  as  respects  safety  and  pro- 
ductiveness, we  must  intrust  it  to  a  single  executive,  under  any  title  we 
please ;  but  to  one  man,  who  will  make  the  bank  the  focus  of  hLs  aspira- 
tions, and  know  that  on  his  prudence  and  success  will  depend  the  character 
ho  most  affects,  and  the  duration  of  his  office,  with  all  its  valued  associa- 
tions and  consequences. 

Appointment  of  the  Executive. — If  the  proposed  organization  is  the  best 
that  can  be  devised  for  a  bank,  the  magnitude  of  power  to  be  delegated  is 
no  proper  argument  against  its  delegation,  but  only  a  motive  for  prudence 
in  selecting  the  delegate.     A  man  of  known  skill  and  cstaljlished  fideUt; 


DrXIES    OF    BANKERS.  143 

is  not  alwa3-s  procurable  for  the  proposed  duties,  especially  by  small  banka 
that  can  not  render  available  a  breach  of  the  tenth  coniniandnient.  But 
providentially  the  world  is  not  so  dependent  on  a  few  eminent  men,  as  their 
eelf-love,  and  our  idolatry  may  believe.  Every  well  organized  person  pos- 
sesses an  aptitude  to  grow  to  the  stature  of  the  station  in  which  circum- 
stances may  place  him ;  and  some  of  the  most  successful  bankers  of  our 
State  acquired  their  skill  after  they  became  bankers.  The  like  principle  is 
discoverable  in  all  occupations,  tlie  highest  not  excepted.  Few  of  our 
judges,  generals,  diplomatists,  legislators,  or  civil  executives,  were  accom- 
plished in  theur  vocation  before  they  became  invested  therewith.  Skill  is 
consequent  to  station  and  its  excitement,  though  a  vulgar  error  expects 
(what  is  impossible)  that  official  dexterity  and  competence  should  be  pos- 
sessed in  advance. 

TJie  Power  to  be  Granted  to  the  Executive. — On  the  chief  executive  should 
be  devolved  the  responsibility  of  providing  funds  to  meet  the  exigences  of 
the  bank;  hence  he  is  entitled  to  dictate  whether  leans  shall  be  granted  or 
withheld,  and  the  length  of  credit  that  shall  be  accorded  to  the  borrowers 
respectively.  With  him  rests  also  a  knowledge  of  the  banking  value  of 
each  customer ;  he  should  therefore  be  permitted  to  select  from  applicants 
the  persons  to  whom  alone  loans  shall  be  granted.  The  responsibility 
should  also  be  cast  on  him  of  making  the  bank  pecuniarily  profitaljle  to  the 
stockholders ;  hence  he  will  be  stimulated  to  obtain  good  accounts,  and  to 
extend  business  to  the  utmost  capacity  that  his  judgment  will  justify.  On 
his  untiring  vigilance  should  be  reposed  the  safety  of  the  capital ;  hence  no 
loans  should  be  granted  with  whose  security  he  is  dissatisfied,  nor  any  ex- 
cept those  with  which  he  is  satisfied — even  the  improper  negation  of  a  loan 
being  usually  a  small  evil  to  the  bank,  how  important  soever  it  may  be  to 
the  proposer.  The  Bank  of  England,  with  a  capital  of  about  (mcludmg 
surplus)  $90,000,000,  intrusts  the  loaning  thereof  to  the  governor  alone. 
He  has  under  him  a  sub-governor,  selected  from  the  directors,  while  an  ex- 
ecutive committee,  designated  by  the  Board,  may  be  consulted  by  him ;  but 
the  committee  employs  itself  in  digesting  matters  for  the  action  of  the  court 
of  directors,  rather  than  in  clogging  the  proceedings  and  diminishing  the 
discretion  of  the  governor.  All  the  joint-stock  banks  of  England  are  organ- 
ized with  a  like  self-depending  executive,  under  the  name  of  general  man- 
ager; and  a  bank  organized  thus  to  grant  loans  at  all  times,  during  its 
business  hours,  will  present  a  great  inducement  to  customers  over  a  bank 
whose  discounts  are  accorded  at  only  stated  days,  and  after  a  protracted 
deliberation  by  directors — loans  being  often  useful  only  Avhen  obtained 
promptly.  Even  the  due  protesting  of  dishonored  paper,  and  notifying  of 
endorsers — the  enforcement  of  payment,  or  the  obtainment  of  secmity  on 
debts  which  prove  to  be  unsafe,  will  all  wholesomely  fall  under  the  control 
of  the  chief  executive,  by  reason  that  the  vigilance  of  one  person  can  con- 


144  DUTIES    OP    BANKERS. 

trol  them  better  than  a  divided  vigilance ;  and  that  the  debts  having:  come 
into  the  banli  by  his  agency,  liis  self-love  is  interested  in  their  collectability. 
He  must  feel  -4,  'ike  responsibility  against  losses  by  forgery,  overdiawn  ac- 
counts, the  depredation  of  burglars,  and  the  peculation  of  subalterns.  To 
secure  in  the  highest  degree  his  vigilance  in  these  particulars,  he  should  be 
intrusted  with  the  selection  of  all  subordinate  agents,  even  of  the  notary 
and  attorneys.  At  least  none  should  be  appointed  or  retained  with  whom 
ne  is  not  satisfied.  His  self-respect  can  not  be  too  much  fostered  by  the 
Board,  and  no  measure  should  be  enforced,  and  no  loans  granted,  which  can 
wound  his  sensibilitj',  or  diminish  his  influence  with  his  subordinates,  or  the 
customers  of  the  bank.  The  more  he  can  thus  be  brought  to  identity  him- 
ieW  with  the  bank,  the  more  the  bank  will  be  exempt  from  the  disadvan- 
tages which  make  corporations  contrast  unfavorably  with  private  establish- 
ments ;  and  which  a  proverb  alludes  to  in  saj'ing  that  what  is  every  man's 
business  is  nobody's.  So  great  is  their  assimilation  to  their  bank  which 
some  managers  attain,  that  a  poignancy  of  solicitude  in  relation  to  the 
debts  of  the  bank,  the  preservation  of  its  credit,  and  the  productiveness  of 
its  capital,  becomes  the  greatest  evil  of  their  position ;  especially  when  they 
are  predisposed  to  morbid  nervousness,  which,  with  disease  of  the  heart, 
their  position  induces  and  fosters.  Such  a  man  will  obtain  from  his  Board 
all  the  information  it  can  yield  him  in  relation  to  the  pecuniary  responsibility 
of  his  dealers ;  and  the  directors  should  give  him  their  opinion — not  man- 
datory, to  relieve  his  responsibility,  but  to  inform  his  judgment,  though  he 
will  soon  discover  that  his  only  safe  guide  will  consist  of  hia  feelings 
founded  on  personal  observations  too  subtle  often  to  be  described,  much 
less  enumemted. 

His  Salary. — His  salary  should  be  liberal,  for  nature  will  not  otherwise 
produce  the  aetivity  of  mind  and  body  that  are  essential  to  his  duties.  Be- 
sides, he  must  engage  in  no  private  business,  and  will  possess  neither  leisure 
nor  taste  to  attend  minutely  to  his  domestic  expenses.  No  salary  can  equal 
in  value  the  devotion  of  such  an  officer;  still  extravagance  is  unwise  as  an 
example,  and  unnecessary  as  a  stimulant.  The  more  capable  the  officer,  the 
more  he  will  appreciate  money;  and  instances  are  frequent  where  bank 
services  of  the  most  valuable  kind  are  accorded  on  salaries  that  would  be 
deemed  imsatisfactorily  small  by  officers  whose  habits  are  less  suited  for 
the  station. 

The  Supervision  of  the  Board  over  the  Manager. — The  duties  of  a 
Board  will  rather  commence  than  end  with  the  appointment  of  its  execu- 
tive. Their  proper  duties  are  supervisory.  Nature  aids  the  discharge  of 
Buch  duties  when  the  supervisor  is  distinct  from  the  supervised ;  indeed, 
one  of  the  most  difficult  tasks  of  a  supervisor  consists  in  restraining  the 
undue  oaptiousness  that  is  natural  to  the  position.     The  president  of  the 


DUTIES    OF    BANKERS.  145 

bank,  as  head  of  the  corporation,  can  not  perform  too  eflBciently  supervisory 
duties,  and  he  may  well  be  entitled  to  a  pecuniary  compensation  therefor. 
lie  should  deem  them  under  his  special  charge;  but  not  to  Bupersede 
therein  the  modified  duties  of  the  other  directors.  Supervision  over  the 
manager's  olScial  proceedings  will  bo  as  salutary  to  him  as  proper  to  the 
]5oard.  Darkness  is  proverbially  unfiivorable  to  purity,  but  only  by  reason 
of  the  concealment  it  creates :  every  other  means  of  concealment  is  equally 
productive  of  impurity.  A  man  can  easily  reconcile  to  his  judgment  and 
conscience  what  can  not  be  reconciled  to  disinterested  supervisors ;  hence, 
if  an  officer  knows  so  little  of  human  nature  as  to  deem  supervision  offen- 
sive, he  is  unfit  to  be  trusted.  That  the  supervision  may  be  full,  it  must  be 
systematic.  Every  director  will  usually  attend  meetings  of  the  Board  in  a 
degree  inverse  their  frequency,  but  twice  a  week,  or  certainly  once,  where 
the  bank  is  not  very  small,  will  be  as  short  as  is  compatible  with  a  due  in- 
spection, singly,  of  the  loans,  in  some  regular  order,  that  may  have  been 
granted  by  the  manager,  since  the  last  session  of  the  Board.  The  directors 
will  thus  leara  individually  whether  the  power  to  make  loans  has  been 
prudently  exercised;  and  he  will  learn  the  opinion  which  any  of  the  Board 
may  express  in  relation  to  the  borrowers  or  their  sureties,  especially  in 
cities  where  borrowers  are  generally  known  to  the  Board  ;  and  a  manager 
may  advantageously  defer  to  it  the  consummation  of  many  loans  in  relation 
to  which  his  own  information  is  questionable,  or  about  which  he  desires 
time  to  deliberate.  Such  a  deferring  will  often  constitute  a  less  offensive 
mode  of  avoiding  an  objectionable  discount,  than  a  direct  and  personal  re- 
fusal; though  truly  the  kindest  act  a  banker  can  perform,  next  to  granting 
a  loan,  is  to  promptly  inform  an  applicant  that  he  can  not  succeed,  when 
the  banker  knows  the  loan  wLU  not  be  granted. 

Supervision  in  Relation  to  Business  Principles. — The  supervision  of 
the  Board  must  be  as  comprehensive  as  the  powers  of  the  manager. 
The  revisions  of  loans  will  enable  the  board  to  ascertain,  not  merely  the 
solvency  of  the  bank's  assets,  but  whether  its  business  is  conducted  with- 
out partiality,  or  unwholesome  bias  of  any  kind.  Nearly  every  undue  par- 
tiality possesses  concomitants  that  may  lead  to  its  detection ; — for  instance, 
an  unusual  laxity  of  security,  or  length  of  credit;  with  unusual  frequency 
of  renewals  in  a  direct  form,  or  an  indirect,  so  as  to  screen  the  operations. 
A  manager,  properly  sensitive  of  his  reputation,  and  properly  diflSdent  of 
his  natural  infirmities,  will  be  reluctant  to  grant  loans  to  his  relatives,  or 
special  friends ;  and  never  to  himself,  or  any  person  with  whose  business 
operations  he  is  connected.  To  enable  directors  to  judge  of  these  particu- 
lars, a  regular  attendance  at  the  stated  meetings  is  necessary ;  but  memory 
alone  must  not  bo  relied  on,  except  to  suggest  queries,  which  should  ahvaya 
be  capable  of  solution  by  proper  books  and  indexes,  that  must  be  within 
reach  of  the  directors ;  who  should  habitually  inspect  the  books,  that  the 

7 


146  DUTIES    OF    BANKERS. 

practice  may,  in  no  case,  seem  an  invidioijs  peculiarity.  In  all  scrutinies, 
however,  the  directors  should  remember  that  in  mere  judgment  and  ex- 
pediency they  may  difler  from  the  manager,  and  he  may  still  be  right,  for 
banking  constitutes  his  business,  while  to  them  it  is  an  incidental  occupa- 
tion. Lenity  is  proper  even  to  his  undoubted  errors,  when  they  are  of  a 
nature  which  experience  may  correct ;  but  time  wiU  only  inveterate  bad 
intentions,  and  their  first  unequivocal  appearance  should  produce  an  unre- 
lenting forfeiture  of  his  office. 

Supervision  over  Liabilities  and  Resources. — The  Board  must  under- 
stand the  liabilities  of  the  bank  to  its  depositors,  bank-note  holders,  and 
other  creditors ;  also  the  funds  of  the  bank,  and  its  available  resources ;  so 
as  to  judge  how  far  the  honor  of  the  bank  is  safe  in  the  care  of  its  man- 
ager. The  character  of  depositors  and  Iwrrowers  are  also  proper  subjects 
of  general  scrutiny  by  the  Board,  by  reason  that  the  reputation  of  a  bank 
is  inferable  from  the  reputation  of  its  dealers ; — not  that  disreputable  peo- 
ple should  be  rejected  as  depositors,  but  a  bank  is  not  an  exception  to  the 
proverb  which  speaks  "  of  birds  of  a  feather ;"  and  when  the  customers  of 
a  bank  are  generally  respectable  in  their  character  and  business,  we  may 
be  sure  that  the  management  of  the  bank  is  at  least  ostensibly  moral  and 
mercantile. 

Supervision  founded  on  Residts. — The  ticklers  of  a  bank  are  books 
which  show  in  detaO  the  debts  due,  prospectively  to  a  bank,  and  the  days 
of  payment.  The  aggregate  footing  of  the  ticklers  will  accordingly  exhibit 
the  amount  of  loans  not  yet  matured,  and  inductively  the  amount  that  is 
past  due.  The  information  which  relates  to  the  amount  past  due  is  often 
given  reluctantly,  but  a  knowledge  of  it  is  vastly  important  in  the  proper 
supervision  of  a  bank :  and  when  tested  by  the  ticklers,  the  information 
can  not  well  be  deceptions,  or  evaded.  In  knowing  the  amount  of  past 
due  loans,  the  Board  can  pretty  accurately  conjecture  the  character  of  the 
bank's  customers.  Such  loans  should  be  satisfactorOy  explained  by  the 
manager,  and  the  means  he  is  taking  in  their  collection.  The  like  may  be 
said  of  over-drafts,*  which  are  rarely  permitted  by  American  bankers, 
though  in  England  they  seem  to  constitute  one  of  the  regular  modes  of 
advancing  money  to  customers.  Whether  they  shall  be  permitted  is  within 
the  proper  discretion  of  the  Board,  and  should  they  occur,  inadvertently, 
the  occm-rence  ought  to  be  manifested  to  the  Board.  An  exemption  from 
losses  is  impracticable  in  long  continued  operations;  yet  all  grades  of  intel- 
lect are  procurable,  hence  the  retention  of  an  ofBcer  is  unwise  when  his  re- 
sults jire  unsatisfactory.  Every  man  can  adduce  excuses  which  no  person 
may  be  able  to  controvert ;  but  when  miscarriages  are  frequent,  or  import- 

*  A  list  of  all  the  credits  due  to  individual  depositors,  will,  by  its  aggregate  amount, 
show,  inductively,  the  amount  of  over-drafts. 


DUTIES    OF    BANKEi:S.  14V 

aut,  the  Board  should  assume  that  something  wrong  exists  and  eludes  de- 
tection, rather  than  that  nature  deviates  from  her  accustomed  processes, 
making  vigilance  unsafe,  and  skill  unprofitable.  The  recent  "  Kochestor 
Knockiugs,"  which  some  people  endeavor  to  unravel,  by  reason  that  they 
deem  the  noises  supernatural,  if  they  can  not  be  otherwise  explained; 
Baner  intellects  pass  without  scrutiny,  being  confident  that  the  inexplica- 
bility  of  the  knockings  can  prove  only  that  the  slu-ewdness  of  observers  ia 
baffled  by  the  artifice  of  the  cxliiljiters. 

Supervision  against  Frauds. — The  examination  of  vaults,  and  counting 
of  money,  rarely  reveal  defalcations,  till  the  defaulter  no  longer  endeavors 
to  conceal  lus  delinquencies.  The  counting  is  not  pernicious,  if  the  Board 
choose  to  amuse  their  vigOance  therewith ;  but  we  have  not  attempted  to 
designate  modes  in  which  frauds  are  detectable ;  the  ingenuity  of  conceal- 
ment being  naturally  as  great  as  the  ingenuity  of  detection.  Besides,  the 
detection  of  intestine  frauds  requires  a  greater  famUiarity  with  banking 
accounts,  and  a  more  laborious  inspection  of  bank-books,  than  can  ordi- 
narily be  expected  of  bank  directors.  For  the  detection  of  ti-auds,  tlicrefore, 
the  best  practical  reliance  is  a  supervision,  in  the  way  we  have  indicated, 
of  the  bank's  business,  and  a  familiar  observation  of  the  general  conduct, 
habits,  and  expenses  of  tlie  manager,  as  well  as  of  all  the  subordinate  offi- 
cers ; — the  latter,  however,  are  more  especially  within  the  duties  of  the 
manager.  The  ruin  of  a  bank,  by  fraud,  commences  usually  in  the  personal 
embarrassment  of  the  dehnquent,  contracted  by  improper  self-indulgences, 
or  the  assumption  of  secret  hazards.  Man  rarely  plunder  till  then-  conduct 
is  otherwise  disorganized,  external  symptoms  of  which  observant  directors 
may  discover.  A  bank  ofiScer,  therefore  (and  the  higher  his  official  position 
the  more  urgent  the  rule),  who  will  not  keep  disengaged  from  all  suretyship 
and  business  that  may  render  him  pecuniarily  necessitous,  is  as  unfit  to  bo 
intrusted  with  a  bank,  as  a  nurse  who  frequents  small-pox  hospitals,  is  unfit 
to  be  trusted  with  unvaccinated  children.  In  menageries,  animals  are  kept 
peaceful  by  preventing  the  cravings  of  hunger ;  bank  executives  require  a 
similar  assuasive ;  not  by  being  glutted  vdth  great  salaries,  but  by  preserv- 
ing themselves  from  expenditures  unsuited  to  their  income,  and  from  pe- 
cuniary liabilities.  A  bank  manager  of  undoubted  wealth  presents  therein 
the  best  attainaljlo  guaranty  against  misconduct,  and  is  entitled  to  greater 
freedom  of  action  in  his  personal  transactions  than  officers  of  ordinary  cir- 
cumstances ;  still  we  will  terminate  this  part  first  of  our  undertaking,  by 
venturing  the  advice,  that  when  a  man  wants  to  be  more  than  a  bank 
manager,  especially  when  he  wants  to  employ  much  more  than  his  own 
funds,  he  had  better  cease  from  occupying  a  station  which  he  is  too  ambi- 
tious, or  too  avaricious  to  fill  under  restraints,  which  experience  shows  are 
alone  safe. 


PRIZE   ESSAY  ON  BANKING. 


SUGGESTIONS  TO  YOUNG  CASHIERS  ON  THE 
DUTIES  OF  THEIR  PROFESSION. 

BY    LORENZO    SABINE, 

OF   FRAMINGHAM,  MASS. 

[The  following  Essay  was  published  in  the  "  Bankors'  Magazine"  in  January,  1852, 
and  was  well  received,  not  only  by  bank  officers,  but  by  the  press.  The  demand  for  it 
has  continued,  and,  unable  to  supply  further  orders,  we  reprint  it. 

Mr.  Sabine,  at  our  request  to  present  such  new  thoughts  as  should  seem  to  him  ad- 
visable, has  made  very  considerable  additions.] 

The  "  Bankers'  Magazine"  is  an  instrument  of  good.  The  observ^ation  of 
every-day  life  clearly  shows  that,  in  consequence  of  disastrous  losses  by 
bank  failures,  of  sorrow  and  ruin  to  friends  by  the  misconduct  of  bank 
ofBcers,  and  of  wounded  feelings  by  reason  of  morose  and  irritable  cashiers, 
many  persons  entertain  strong  disUke  to  banks,  and  to  those  who  are  con- 
nected with  them.  Such  persons,  forgetting  that  incapable,  unfaithful,  and 
disagreeable  agents  have  been  found  in  all  corporations,  and  that  bankrupt- 
cies and  defalcations  have  occurred  in  every  walk  and  pursuit,  affect  the 
sentiment  of  a  celebrated  English  essayist,  and  say,  that  "nothing  truly 
good  can  be  expected  from  men  who  are  ever  poring  over  cash-books  and 
balancing  accounts;"  whOe  others,  relying  upon  the  strange  remark  of  oui 
own  great  moralist  and  philosopher,  Franklin,  aver  that  the  wealth  ac- 
quired by  commerce  is  "generally"  acquired  by  "cheating,"  and  that 
"  agriculture"  is  the  "  only  honest"  employment.* 

It  must  be  admitted  that  defalcations  sometimes  occur  of  a  nature  to  warrant 
almost  universal  distrust.  In  1803,  the  Bank  of  England  lost,  by  the  frauds  of  Astlett, 
one  of  its  clerks,  and  a  nephew  of  the  cashier,  the  enormous  sum  of  one  and  a  half  mil- 
lion  of  dollars;  the  frauds  and  forgeries  of  the  banker  Fauntleroy,  in  18'24,  amounted 
to  over  a  quarter  of  a  million  more;  and  the  defalcation  of  tlie  banker  Stephenson,  In 
1S2S,  was  upward  of  a  million  and  a  quarter.  These  are  the  memorable  delinquents 
in  the  history  of  English  banking.  The  first  suffered  imprisonment  in  Newgate  many 
years ;  the  second  was  executed  ;  the  last  fled  to  the  United  States.    The  largest  indl. 


PRIZE    ESSAY    ON    BANKING.  14  5 

The  Magazine,  then,  by  imparting  correct  iuformation  relative  to  the 
management  of  moneyed  institutions,  and  by  teacliing  banii  officers  that 
prudence,  skill,  and  method  are  as  essential  to  success  as  integrity,  is  per- 
forming a  most  valuable  service  to  bankers,  and  to  the  whole  community. 
It  deserves,  and  sliould  receive,  the  pecuniary  support  of  every  bank  in  the 
United  States.  So,  too,  I  venture  to  say,  that  not  only  executive  officers, 
but  presidents  and  directors,  are  bound  to  increase  its  usefulness  by  con. 
tributing  to  its  pages  the  results  of  tlieir  experience. 

Banking  has  become  a  part  of  the  very  framework  of  our  system  of  basi- 
nesa.  Even  Mr.  Calhoun  said  as  long  ago  as  1816,  when  the  whole  bank- 
iag  capital  in  the  United  States  was  only  eighty  millions  of  dollars,  that 
"  the  question  whether  banks  are  favorable  to  public  liberty  and  pros- 
perity, was  one  purely  speculative.  The  fact  of  the  existence  of  banks, 
and  their  incorporation  with  the  commercial  concerns  and  industry  of  the 
nation,  prove  tliat  inquiry  to  come  too  late.  The  only  question  was,  on 
this  hand,  under  what  modifications  were  banks  most  useftil,"  etc.  Banks 
now  exist,  in  some  form  or  otlier,  everywhere :  and  will  continue,  proba- 
bly, as  long  as  property  shall  be  bought  and  sold  on  credit.  In  all  coming 
time,  therefore,  we  are  to  have  a  class  of  men  to  deal  in  money,  in  promis- 
sory notes,  and  foreign  and  domestic  exchange.  The  avocation  has  ever 
been  honorable,  to  the  last  degree  responsible,  and  exposed  to  many  and 
to  peculiar  temptations. 

Wrecked  and  ruined  Ijank  officers  are  around  us  on  everj-  hand.  The 
world,  seemingly  more  inexorable  with  our  profession  than  with  others, 
deals  out  its  direct  maledictions  upon  those  of  us  who  err,  and  will  hardly 
forgive  the  managers  of  a  broken  bank,  or  the  officer  whose  "cash  is  short," 
even  when  there  is  no  other  guilt  than  creduUty,  too  easy  good-nature,  or 
incapacity.  To  stand  upon  our  defense  against  unjust  accusations,  and  to 
do  what  we  can  to  diminisli  the  causes  of  corporate  and  of  individual  delir 
quency,  are  duties  which  we  owe  to  ourselves  and  to  those  who  are  to  suc- 
ceed us.  Dispersed,  as  we  are,  over  a  vast  extent  of  country,  we  can  only 
correct  public  sentiment,  and  afford  counsel  and  admonition  to  one  another, 
as  well  as  render  our  knowledge  of  banking  avaUable  as  common  stock,  by 
means  of  the  work  established  for,  and  devoted  to,  our  benefit. 

Banki?,  with  us,  both  public  and  private,  differ — as  none  need  to  be  told 

vidual  defaulters  on  this  side  of  the  Atlantic,  as  the  facts  now  stand,  have  been  among 
the  officers  of  railroads. 

As  rogards  bank  failures,  it  may  well  be  doubted  whetlier  mismanagement,  as  a 
cause,  has  been  as  extensive  in  this  country  as  in  Ireland.  There,  according  to  Sir 
Henry  Parnell,  who  is  good  authority,  the  issuing  of  paper  money  has  been  carried  to 
such  an  injurious  excess  as  to  be  without  a  parallel,  perhaps,  in  the  commercial  world. 
The  twenty-five  years  ending  with  the  year  IS'25,  was  a  period  of  nearly  general  bank- 
ruptcy. Eleven  failures  followed  in  quick  succession  ;  and  of  fifty  banks  in  operation 
in  lSii4,  eight  alone  maintained  their  standing.  During  tliis  quarter  of  a  century, 
Ireland,  says  Sir  Henry,  was,  "  from  time  to  time,  involved  in  Immense  distieas." 


150  PRIZE    ESSAY    ON    BANKING. 

■ — in  many  tilings  from  those  of  England  and  of  Continental  Europe.  It  is 
known,  also,  that  our  system  is  far  from  being  uniform,  and  that  essential 
improvements  can  be  made  in  it.  Hence,  whatever  the  value  of  essays 
upon  foreign  banking,  papers  devoted  to  our  own  are  far  more  useful  to  us, 
regarded  as  a  class;  and  hence,  too,  the  necessity  for  a  free  interchange  of 
tiiought  by  bankers  in  diflerent  parts  of  the  Union. 

Entertaining  these  views,  I  can  not  but  hope  that  the  Magazine  will  be 
enriched,  from  time  to  time,  not  only  with  "  Suggestions  to  Young  Cashiers 
on  the  Duties  of  their  Profession,"  but  with  articles  on  the  subject  of 
American  banks  and  banking  generally. 

I  pass  now  to  topics  immediately  connected  with  the  duties  of  a  Cashier. 
The  limits  indicated  do  not  admit  of  elaborate  reasoning,  but  demand,  in- 
deed, that  mere  suggestions  shall  be  made  with  the  brevity  of  proverbs.  I 
may  be  permitted,  then,  to  address  myself  to  the  young  officer,  directly, 
and,  as  it  were,  personally. 

You  are  to  lead  a  life  so  confined,  sedentary,  and  in  some  respects  so 
mechanical,  that,  unless  you  observe  great  care,  you  will  become,  in  the 
lapse  of  years,  a  sort  of  machine  for  computing  discounts,  counting  money, 
writing  letters,  and  keeping  books.*  You  are  to  transact  business,  and  to 
have  a  constant  intercourse,  with  men  of  every  shade  of  character,  of  every 
variety  of  disposition,  and  of  every  degree  of  intelligence.  Your  temper  is 
to  be  tried  by  interruptions  at  the  most  unseasonable  moments,  to  attend 
to  the  calls  of  the  impatient,  or  to  answer  the  inquiries  of  the  ignorant  or 
inquisitive.  You  are  to  be  tempted  to  embark  in  speculations  in  stocks ;  to  be 
solicited  to  allow  overdrawings  and  other  irregularities  by  the  companions 
of  your  social  hours,  and,  it  may  be,  by  one  or  more  of  your  own  directors ; 
and  you  are  to  have  the  same  domestic  cares  and  afflictions,  the  same  per- 
sonal aches  and  pains,  as  other  men ;  and  yet  you  are  expected  to  be  ever 
at  yoiu"  post,  to  be  ever  courteous,  to  stand  fast  in  your  integrity,  and  to  seem 
cheerful,  and  even  happy.  In  a  word,  and  as  Girard  said  at  the  decease 
of  his  old  and  faithful  cashier,  "  the  hank  must  go  on,''''  whatever  your  pri- 
vate griefs,  or  indi\'idual  disabilities.  Your  position  is  thus  one  of  much 
difficulty,  responsibility,  and  perU ;  and  you  need  a  knowledge  of  the  laws 
of  your  physical  being,  the  counsel  of  wise  friends,  strict  and  daily  self- 

*  Every  person  of  observation  will  attest  to  the  need  of  the  caution  in  the  text.  Long 
and  close  application  to  one  branch  of  business,  and  the  habit  of  being  at  one  place  for 
a  course  of  years,  produce  wonderful  transformations  in  the  character.  The  case  of 
Mr.  Kippon,  late  chief  Cashier  of  the  Bank  of  England,  furnishes  an  illustration  well 
worth  citing.  He  was  connected  with  that  institution  for  more  than  half  a  century, 
and  asked  for  but  a  single  leave  of  absence  from  his  post  during  the  entire  period,  and 
in  this  instance,  even,  he  applied  at  the  suggestion  of  his  physician,  on  the  ground  cf 
ill  health.  Permission  was  granted ;  and  our  bank  officer  departed  from  London,  to 
be  absent  two  weeks.  Hut  the  country  was  without  charms ;  idleness  preyed  upon 
his  spirits,  and  the  habit  of  years  was  so  strong,  that,  at  the  end  of  three  days,  he 
returned  to  the  bank,  sulely  to  become  happy  again. 


PRIZE    ESSAY   ON    BANKING.  15) 

BXEiiiiiuition,  and  deep  relij^ious  principle,  to  enable  you  to  sustain  it  in 
health  and  honor.  But  bo  of  good  cheer;  be  a  true  man,  and  you  will 
overcoiuo  every  obstacle  in  the  way  of  a  long  and  of  a  useful  life. 

Your  duties  may  be  considered  under  various  heads.  And  first,  those 
which  are  general.  Your  bank  has  secrets;  and,  that  they  be  kept  invio- 
lable, adopt  a  rule  to  speak  of  its  affairs  only  to  persons  connected  with  you 
in  its  management.  An  incident  to  which  I  was  a  party,  may  serve  as  a 
story,  and,  perhaps,  to  show  the  necessity  of  the  rule  here  enjoined  upon 
you.  Some  years  ago,  I  was  in  the  direction  of  a  bank  (in  a  town  on  the 
eastern  frontier  of  the  United  States)  which  earned  a  considerable  part  of 
its  dividends  by  receiving  the  notes  of  the  banks  of  one  of  the  British  col- 
onies, at  a  small  discount,  and  sending  them  home  for  redemption.  The 
general  suspension  of  specie  payments  occurred ;  and  we  were  left  with  an 
inconvenient  amount  of  these  notes  on  our  hands,  which  the  banks,  one 
and  all,  refused  to  redeem.  The  situation  of  our  customers  was  such,  in 
the  mistrust  that  prevailed,  that  after  much  deliberation,  we  resolved  to 
continue  our  regular  business.  The  result  was  that  we  became  indebted  to 
the  Boston  bank  which  kept  our  accounts,  in  a  sura  quite  equal  to  one  half 
of  our  capital  stock.  This  state  of  things  produced  much  anxiety.  My 
own  disquietude  caused  many  sleepless  nights.  We  were  in  almost  con- 
stant session  to  devise  some  plan  of  relief  Bui  ive  kejjt  our  secret.  Though 
solvent  and  with  a  surplus,  we  felt  sure  that,  excited  as  the  public  mind 
then  was,  a  whisper  of  our  condition  out  of  doors  would  be  disastrous. 
Meanwhile,  colonial  bank-notes  accumulated  every  day.  We  bartered  off 
some  for  Mexican  dollars  at  a  high  premium ;  we  bought  a  thousand  Span- 
ish doubloons  with  others,  and  lost  nearly  one  thousand  dollars  by  the  op- 
eration. These,  and  similar  eflbrts  to  reduce  our  debt  in  Boston,  were 
too  expensive,  and  we  determined,  at  last,  to  wait  the  course  of  events. 
Months  elapsed :  bvt  we  still  kept  our  secret.  In  time,  intelligence  reached 
us  that  one  of  the  debtor  banks  had  ordered  from  New  York  twenty-five 
thousand  dollars  in  American  gold,  and  that  the  precious  coin  was  actually 
on  the  way  in  a  vessel  called  the  Teazer.  We  met  without  delay.  A  vote 
was  passed  by  a  majority  of  one  to  send  the  sherift'  of  the  county  to  sea 
to  intercept  the  Teazer  on  her  passage  to  the  colonial  port  to  which  she 
was  bound,  and,  finding  her  within  the  jurisdiction  of  the  United  States, 
and  within  the  waters  of  the  sheriirs  own  county,  to  attach  the  gold  on 
our  account.  The  proceeding,  under  the  circumstances,  was  thought  haz- 
ardous ;  three  of  our  number  refused  assent ;  the  sheriff  demanded  a  bond 
of  indemnity.  We  designed  to  conduct  the  enterprise  quietly ;  but,  by 
means  which  we  never  ascertained,  the  colonial  bank  got  wind  of  our  in- 
tention, and  dispatched  several  pilot-boats,  with  their  directors  on  board,  to 
defeat  us.  The  sheriff  was  a  shrewd  man ;  and,  accompanied  by  a  saga- 
cious old  shipmaster,  was  successful.  The  cashier  of  the  delator  bank  soon 
presented  himself  at  our  counter,  and  demanded  the  gold  as  his  private 


162  PRIZE    ESSAY    ON    BANKING. 

property.  A  person  in  whom  he  reposed  confidence  intimated  to  us  that 
an  oflBcer,  with  a  writ  of  replevin,  would  take  the  weU-canvased  box  from 
our  possession.  Thereupon,  three  of  our  number  hurried  to  our  vault  as 
fast  as  feet  could  move,  divided  our  pme,  and  strode  rapidly  homeward. 
My  share,  in  the  excitement  of  the  moment,  or  in  my  excess  of  zeal,  was 
ample.  Atiraid  to  use  desk  or  drawer  as  a  place  of  deposit,  I  concluded  to 
thrust  my  part  of  the  "spoils  of  victory"  into  a  cat-hole  in  the  cellar  floor, 
over  a  drain.  The  end  was  not  yet.  The  master  of  the  Teazer,  on  his  ar- 
rival at  the  port  of  destination,  was  sued  for  the  gold,  and  cast  into  prison ; 
and  before  terms  of  settlement  were  arranged,  many  other  vexatious  meas- 
ures disturbed  us.  The  affair  gave  rise  to  a  great  deal  of  talk ;  and  some 
incidents  which  I  have  omitted,  as  not  pertinent  to  my  purpose,  afforded 
infinite  amusement  to  the  lovers  of  fun.  TJie  secret  of  our  great  indebted' 
ness  to  our  Boston  hmik  was,  hoiuever,  treasured  for  years. 

You  should  embrace  every  opportunity  to  acquire  information  as  to  the 
standing  of  your  customers ;  and  whatever  is  imparted  to  you  on  the  sub- 
ject, whether  in  confidence  or  otherwise,  should  be  communicated  to  your 
directors,  and  to  them  alone. 

You  should  become  acquainted  with  the  laws  relative  to  banking,  and 
especially  with  those  of  your  own  State ;  and  should  be  famihar  with  some 
work  which  treats  of  notes  and  bills,  of  the  liabihties  of  sureties,  drawers, 
and  indorsers.  I  recommend  as  the  easiest  way  to  obtain,  and  to  retain, 
knowledge  in  these  particulars,  that  you  make  a  manual,  or  brief  digest, 
with  marginal  references  to  the  authorities  which  you  consult.  The  best 
books  are  the  latest  American  editions  of  Bayley  on  BLUs  and  Notes  gen- 
erally, and  Story's  Commentaries  on  the  Law  of  Promissory  Notes.  To 
master  these  works,  or  even  to  obtain  common  knowledge  of  the  immense 
learuLag  whicli  they  contain,  Mill  require  time — much  time.  But  the  leading 
principles  applicable  to  promissors  and  other  parties  to  commercial  paper, 
are  easUy  fixed  in  the  memory,  and  no  time  should  be  lost  in  consulting  the 
latter  treatise,  at  the  very  least.  So,  too,  chapter  eleven  of  Storj^,  which 
relates  to  checks,  should  also  be  well  studied,  since  this  kind  of  currency 
has,  as  that  distinguished  jurist  observes,  "grown  into  daily  and  general 
use,"  and  will  be  presented  at  your  counter  almost  as  often  as  money  itself. 
I  recommend  to  the  young  cashier  to  devote  a  part  of  his  leisure  to  pro- 
fessional reading  of  a  more  general  nature.  The  history  of  the  system  of 
credit  is  not  only  curious,  but  mteresting  and  instructive.  Strangely  enough, 
as  he  will  find,  bankmg  owes  its  origin  to  the  Crusades,  for  the  earliest  in- 
stitution of  which  there  is  any  account  was  a  mere  bank  of  deposit,  estab- 
lished at  Venice,  late  in  the  twelflh  century,  for  the  purpose  of  aiding  those 
who  fought  to  win  the  Holy  Land  from  its  unholy  possessors.  Such  was 
the  first  element;  and  the  degree  of  security  and  facility  of  commercial 
transactions  of  the  period  may  be  seen  in  the  fact  that,  in  England,  con- 
tracts between  individuals  were  discharged  by  payments  in  cattle,  horses, 


PRIZE    ESSAY    ON    BANKING.  It 3 

dogs,  and  even  hawks;  and  that  rents,  fines,  and  taxes  due  the  crown 
were  paid  in  the  same  kinds  of  property,  in  products  of  the  soil,  and  in 
merchandise  generally.  In  a  word,  the  idea  of  paper  money  based  on  the 
precious  metals,  or  on  personal  estate  and  credit,  or  on  lands,  had  not  been 
conceived,  we  may  fairly  conclude,  anywhere.  Next,  if  the  notes  of  my 
own  reading  be  accurate,  and  equally  strange,  we  hear  of  some  sort  o^ paper 
credit,  early  in  the  thirteenth  century,  not  in  any  trading  country  of  Europe, 
but  in  far-ofl;  and,  as  we  commonly  say,  m  barbarous  China.  So,  again, 
toward  the  close  of  the  last-mentioned  century,  wo  are  told  that  the  hated 
and  hunted  Jews  and  Lombards  invented  thehill  of  exchange,vf\^ich  afforded 
means  for  the  silent  and  secret  transfer  of  funds  from  country  to  country,  to 
the  infinite  discomfiture  of  robber  kings  and  of  robber  outlaws.  Next, 
probably,  in  chronological  order,  was  the  promissory  note,  wliich  strange 
device,  grave  and  learned  judges,  in  solemn  wig  and  ermine,  dared  at  length 
to  pronoimce  to  worn  and  weary  litigants,  might,  if  traffickers  so  willed, 
pass  current  from  one  person  to  another,  and  be  lawfully  collected  by  the 
final  owner.*  Still  again,  about  the  middle  of  the  fourteenth  century,  we 
meet  with  the  origin  of  public  scrip  in  the  governmental  certificates  of 
Florence,  which,  I  suppose,  were  the  first  ever  issued  in  Europe.  Thus  we 
have  five  elements  in  modern  banking.  Two  others,  namely,  those  of  dis- 
count and  circulation,  were  yet  wanting.  Neither  power  was  conferred  upon 
the  Bank  of  Amsterdam,  which,  founded  near  the  opening  of  the  seventeenth 
century,  was  designed  merely,  as  it  would  seem,  to  check  the  evils  of  a 
clipped  and  worn  metallic  currency.  Nor  was  the  Bank  of  Hamburg,  which 
was  established  immediately  after,  hardly  more  than  an  institution  for  de- 
posit and  transfer.  In  the  progress,  however,  of  civilization,  of  commercial 
dealing  and  necessity,  we  come  at  last,  and  toward  the  close  of  the  seven 
teenth  century,  to  the  Bank  of  England,  which  was  invested  with  authority 
to  receive  deposits,  to  buy  and  sell  exchange,  to  aid  in  the  management  ot 
public  securities,  to  discount  promissory  notes,  and  to  issue  a  paper  currency. 
And  so  it  appears  from  this  rapid  view,  that  more  than  five  hundred  years 
elapsed  before  all  the  elements  of  modem  banking  were  combined,  arranged, 
and  reduced  to  a  system  in  which  statesmen  and  merchants  reposed  con- 
fidence. 

The  young  cashier  having,  by  his  researches,  convicted  me  of  inaccuracy, 
or  having  established  the  truth  of  the  foregoing  outUnes  of  bank  history, 
may,  as  opportunity  occurs,  pursue  the  subject  still  further.  The  first  charter 
of  the  Bank  of  England  is  accessible,  and  he  may  study  it  with  profit,  and 
to  ascertain  the  immense  progress  which  has  been  made  in  the  principles 
of  banking,  whether  as  relates  to  rights  of  stockholders,  or  to  public  con- 

•  As  late  down  as  the  reign  of  William  and  Maby,  the  courts  of  England  refused 
to  consider  an  inland  bill  of  exchange  a  legal  instrument ;  nor  was  it  until  the  time  of 
Annk,  that  a  promissory  note,  In  the  hands  of  an  indorsee,  could  be  collected  by  law 
of  the  maker. 


154  PKIZE    ESSAY    ON    BANKING. 

venience  and  safety.  He  will  find  valuable  lessons  in  the  legislation  of  his 
own  country ;  in  the  issue  of  paper  money  prior  to  the  Revolution,  which 
at  times  flooded  the  colonies,  and  which,  in  spite  of  the  clamors  of  our 
fathers,  was  suppressed  by  Parliament ;  in  the  marvelous  tales  and  tradi- 
tions which  have  come  down  to  us  of  the  never-to-be-forgotten  "continental 
money,"  without  which  the  bonds  of  colonial  vassalage  would  not  have 
been  broken  when,  and  as,  they  were ;  in  the  earlier  charters  of  the  diifer- 
ent  State  governments ;  and  in  the  two  charters  of  Congress  of  the  great 
national  institution  which  has  now  ceased  to  exist. 

This  general  inquiry  concluded,  he  will  have  improved  his  own  mind, 
and  be  ready  to  meet  and  to  reason  witla  those  wlio,  because  tlie  system 
has  not  been  perfected  in  a  century  and  a  half  (dating  from  the  establish- 
ment of  the  Bank  of  England),  demand  its  entire  abolition,  or  at  least  such 
changes  as  would  render  it  powerless  for  good,  alike  to  individuals  and  to 
communities.  He  can  say  and  prove  that  credit,  wide,  hberal,  beneficent 
credit,  belongs  to  the  era  of  liberty,  and  that  it  was  unknown  even  in  free 
England  untQ  after  the  expulsion  of  the  Stuarts,  and  until  the  Revolution 
there  had  secured  personal  freedom.  He  may  stand  upon  the  emphatic  declara- 
tion of  a  great  statesman,*  that  the  system  of  credit,  as  it  now  prevails,  is 
the  vital  air  of  commerce,  and  that  "it  lias  done  more,  a  thousand  times,  to 
enrich  nations  than  all  the  mines  in  all  the  world."  He  should,  indeed,  ad- 
mit that  its  fluctuations,  its  ebbs  and  flows,  sometimes  cause  desolation  and 
ruin ;  yet  he  should  not  fail  to  insist  tliat  good  and  wise  men  steadily  strive  to 
improve  it — that,  as  sweeping  conflagrations  allow  of  the  straightening  and 
widening  of  streets ;  and  as  disasters  in  traveling  by  steam  suggest  more 
careful  management  and  better  maeliinery,  so  do  bank  failures  and  the  de- 
linquencies of  bank  ofBeers,  however  appalUng  the  circumstances  at  the 
moment,  serve  to  discover  and  to  apply  new  checks  and  new  remedies. 

If  your  bank  is  old  enough  to  have  been  through  "a  crisis,"  and  if  you 
have  not  served  in  it  as  an  inferior  officer,  you  have  much  to  learn  of  its 
past  business.  Such  an  institution,  for  example,  has  a  "suspended  debt" 
account,  or  at  best  overdue  paper  secured  by  mortgage  or  other  collateral ; 
and  assets  of  this  description  always  have  a  history,  and  sometimes  a  very 
intricate,  a  very  perplexing  one.  But  you  must  become  master  of  that 
history.  Directors  change  every  year ;  and  in  a  little  time,  all  who  were 
at  the  "  Board"  when  this  class  of  paper  was  taken  will  have  vacated  their 
seats ;  while,  then,  some  are  stOl  in  the  direction,  make  written  memoranda 
of  the  principal  facts. 

Let  it  be  manifest  to  your  associates  and  stockholders,  that  you  feel  an 
interest  in  every  thing  which  relates  to  their  welfare.  To  work  the  whole 
of  your  capital  and  of  your  deposits,  to  keep  both  actively  employed  at  all 
times,  and  yet  to  be  always  al)le  to  meet  your  bills  at  the  point  of  redemp- 
tion, require  great  wisdom ;  and  the  most  skillful  and  experienced  financiers 
*  Mr.  Wcbeter. 


PRIZE    ESSAY    ON    BANKING.  155 

Bomotimcs  find  themselves  at  fault  for  the  moment.  Still  your  duty  de- 
mands continual  experiments  to  effeet  tliis  great  object ;  tlie  recollection 
and  correction  of  your  own  mistakes  of  judgment,  as  well  as  a  careful  eye 
upon  some  of  your  customers,  who  obtain  discounts  under  promises  to  give 
your  money  "  a  good  circulation." 

Need  I  suggest  tlie  benetits  of  a  fixed  system,  and  of  method,  even  in 
matters  seemingly  of  little  consequence.  Every  body  finds — as  seamen 
have  it — tliat  "a  stern  chase  is  a  long  chase."  The  business  of  to-day 
should  never  be  deferred  tiU  to-morrow.  Answer  letters,  and  file  papers, 
at  the  instant.  Remember  every  thing,  if  possible ;  but  trusting  to  memory 
in  notliing :  let  your  books  contain  a  record  of  all  transactions.  Allow  no 
outstanding  bills  against  the  bank ;  and  have  a  voucher  for  the  smallest 
item  charged  to  "  Expense  Account." 

You  can  be,  and  you  ought  to  be,  ready  for  an  "  examination"  by  the 
"Commissioners,"  or  other  functionaries  of  the  government,  and  of  your 
own  "Board,"  without  previous  notice,  and  without  the  shghtest  special 
preparation.  In  fine,  close  your  vault  daily  with  the  reflection  that  no 
act  has  been  neglected,  and  that,  if  sickness  or  death  should  occur  "  the 
bank  can  go  on"  wMi  no  loss  to  your  family,  sureties,  or  stockholders.  Do 
not  smile,  if  I  add,  that  your  banking-rooms  should  be  swept,  and  your 
desks  and  counters  be  dusted  daily ;  that  one  "  slut-hole"  is  ample  for  all 
the  twine  and  waste-paper ;  and  that  the  accumulation  of  official  papers 
and  memorandums  in  yoiu"  private  drawer  wUl  cause  both  you  and  your 
associates  serious  delays  and  much  inconvenience. 

Panics  and  pressures  are  as  certain  in  banking  as  storms  in  winter. 
When  either  exist,  firmness  and  courage,  if  not  really  possessed,  must  be 
assumed.  You  are  presumed  to  know  the  nature  and  extent  of  your  re- 
sources under  all  cu-cumstauces,  and  at  periods  of  general  distrust  especi- 
ally ;  and  if  the  amount  of  those  immediately  available  are  insufficient  for 
every  possible  call  upon  you,  thus  advise  your  directors  without  delay. 
Should  there  be  "a  run  for  specie,"  pay  your  bill-holders  the  kinds  of  coin 
they  ask  for  so  cheerfully,  and  with  so  careless  an  air,  that  they  shall  ob- 
serve no  reluctance  to  part  with  it,  but,  on  the  other  hand,  an  apparent  joy 
to  be  rid  of  it. 

A  knowledge  of  human  character  is  indispensable.  Study  it.  The 
"actions,  looks,  word.s,  and  steps"  of  your  customers  "form  an  alphabet:" 
and  your  "  eyes  are  spectacles  to  read  others'  hearts  with."  Careful,  close, 
and  continued  observations  will  enable  you  to  detect  a  counterfeit  man  as 
readily  as  you  now  do  a  counterfeit  bank-note.  My  own  experience  is,  that 
those  who  change  countenance,  or  the  weight  of  the  body  from  one  foot  to 
the  other,  when  meeting  a  full,  searching,  and  fixed  gaze,  are  not  truthful ; 
that  those  who  ask  for  additional  accommodations,  prefacing  the  request 
with  a  story  divided  into  acts  like  a  drama,  are  already  bankrupt;  and  that 
those  who  petition  In  whispers,  in  an  unnatural  tone  of  voice,  in  a  cant,  or 


15fl  PRIZE    ESSAY    ON    BANKINO. 

a  whine,  are  hypocrites.     Some  years  hence,  I  shall  be  glad  to  ascertain 
how  nearly  your  experience  accords  with  mine. 

Tou  should  be  courteous  and  respectful  to  all.  Self-command  is  a  great 
virtue ;  indulgence  of  passion  is  a  great  fault.  Impertinence  and  stupid 
ignorance  might  sometimes  be  rebuked,  were  it  not  for  the  danger  of  con- 
tracting a  morose  and  irritable  habit  of  speaking.  There  is  no  loss  of  dig- 
nity, or  of  self-respect,  in  perfect  silence  under  the  greatest  provocation, 
and  that,  accordingly,  is  your  safest  course.  The  cashier's  popularity  or 
unpopularity  gives  character  to  a  bank.  The  dii'cctors  are  seldom  visible, 
and  sometimes  unknown,  to  occasional  customers;  but  their  executive 
oflScer  is  an  ever-present  and  a  known  man,  and  should  bear  in  mind  the 
Latin  proverb,  namely,  to  "be  cautious  what  he  says,  when,  and  to 
whom."* 

Should  you  acquire  a  reputation,  you  may  be  solicited  to  change  your 
place ;  or,  becoming  discontented,  may  seek  to  do  so  on  your  own  motion. 
In  the  former  case  you  are  to  consider  your  directors  as  your  friends,  and, 
stating  all  the  facts  fairly,  obtain  their  views  before  taking  a  single  step  to 
meet  the  overture  made  to  you.  This  is  an  imperative  duty ;  and  perform- 
ing it  in  honor,  and  acting  under  the  advice  of  wise  counselors,  you  can 
hardly  come  to  a  wrong  conclusion.  I  assume  here  that  your  bank  ia 
sound,  and  that  it  is  under  the  direction  of  competent  and  safe  men.  If 
unfortunately  otherwise,  if  your  reputation  be  at  stake,  and  your  directors, 
or  a  governing  part  of  them,  are  ignorant  or  regardless  of  the  principles  of 
banking,  or  are  "speculators,"  who  seek  their  own  accommodation,  you 
should  retire  at  once.  But  upon  this  point  J  will  not  dwell,  since  it  is  to 
be  hoped  that  such  institutions  and  such  men  have  nearly  passed  away. 

It  is  related  that  the  eminence  of  the  five  brothers  Rothschild,  as  bankers, 
is  to  be  attributed  in  a  great  measure  to  tlieir  strict  observance  of  their 
father's  dying  injunction,  to  "  remain  united."  "Well  may  it  be  so.  Una- 
nimity in  the  direction  of  a  bank  is  always  an  element  of  success ;  and  the 
result  of  my  observation  in  this  regard  is,  that  more  losses  occur  from  divis- 
ions, than  from  any  other  single  cause.  Accommodation  notes,  large  and 
standing  loans  to  particular  parties,  and  similar  departures  from  legitimate 
banking,  are  only  to  be  tolerated  in  cases  which  receive  the  assent  of  the 
entire  direction.  Yet,  I  have  known  one  and  all  of  these  departures  to  be 
consummated,  time  and  again,  by  directors  who  owned  the  smallest  possi- 
ble amount  of  stock,  in  opposition  to  the  remonstrances  of  older  and  abler 
associates  who  were  large  stockholders;  and  years  afterward,  when  legal 
remedies  had  been  exhausted,  and  levies  and  set-offs  had  failed  to  restore 
more  than  costs  of  suit,  have  personally  made  wearisome  journeys  and  de- 
voted weeks  to  the  service  of  closing  up,  as  I  best  could,  these  unfortunate 

•  "  A  bill-brokpr,"  says  Mr,  Windham  Beavcs,  "  should  avoid  babbling,  and  be 
prudent  in  his  office,  which  consists  in  one  sole  point,  that  is,  to  hear  all  and  say 
nothing," 


PRIZE    ESSAY    ON    RANKING.  157 

illustrations  of  the  rule  that  "a  majority  sliould  govorn"  in  the  directors' 
room,  as  in  politics.  In  short,  sucii,  in  my  view,  are  the  evils  of  the  ma- 
jority principle  in  this  connection,  that  I  would  counsel  a  cashier,  whether 
young  or  old,  to  insist  upon  a  reasonable  change,  and  a  change  refused,  to 
seek  an  institution  more  wisely,  more  safely  conducted. 

You  may  bo  discontented  without  cause.  I  remember  to  have  read  a 
Btory,  in  which  one  of  the  cliaractcrs  was  in  possession  of  every  thing  that 
heart  could  ask,  but  was  miserable  from  tliis  very  circumstance,  or  because 
ho  wanted — a  want.  Such  persons  exist  in  real  life.  Be  not  of  that  un- 
happy class.  Accommodate  yourself  to  your  condition.  Do  not  seek  for 
happiness  in  cliange  of  place,  but  in  change  of  disposition.  "  The  lazy  ox 
wishes  for  the  trappings  of  the  horse,  and  the  steed  sighs  for  the  yoke,"  is 
an  old  saw  that  has  not  yet  lost  its  meaning.  Nor  should  the  topic  be  dis- 
missed vk^ithout  recalling  the  pithy  epitaph  composed  lor  the  hypochondriac, 
who  quacked  himself  into  his  grave :  "  I  was  well;  but  by  endeavoring  to  be 
belter — am  here."  Let  the  young  cashier  heed  the  moral  contained  in  these 
several  apt  sayings,  and  remember  that  care  and  perplexity  exist  every- 
where. To  smooth  and  fashion  the  rough  stone  of  life  is  a  rehgious  duty. 
The  change  of  one's  home  involves  a  change  of  society,  of  privileges  of  wor- 
ship, of  schools,  of  facilities  in  traveling,  of  household  expenses,  of  access  to 
books,  and  various  other  essentials ;  and  should  be  carefully  considered  in 
every  aspect  before  it  is  actually  undertaken.  And  I  bestow  the  more 
attention  upon  the  point,  because  the  propensity  to  remove  from  one  place 
to  another  is  so  common,  and  because,  within  the  circle  of  my  acquaintance, 
many  have  been  ruined,  and  but  few  have  improved  their  condition  or  in- 
creased their  happiness,  by  seeking  a  new  abode.  In  middle  age,  the 
experiment  is  doubly  hazardous.  Take  up  a  full  grown  tree,  and  will  it 
live  unless  some  of  the  old  earth  go  with  it?  Sunder  the  ties  of  sympathy 
and  affection ;  exchange  old  faces  and  associates  for  new  ones,  and  what  is 
the  condition  of  a  man  ? 

To  resume  my  personal  address  to  the  young  cashier.  Tou  should  not 
possess  an  overweening  desire  of  praise,  nor  invite  commendation.  Nor 
should  you  be  intoxicated  with  your  own  merits. 

You  should  never  speak  of  your  official  acts,  except  in  explanation  and 
in  self-defense.  In  all  pleasantry,  I  will  add,  that,  in  old  age,  you  may  tell 
the  son  who  succeeds  you  what  you  were  in  your  youth ;  but,  now,  be  con- 
tent with  the  quiet  appreciation  of  others.  Delicate  attentions  and  marks 
of  respect  are  the  surest  and  best  manifestations  of  regard,  and  if  you  have 
these,  do  not  pine  in  discontent  or  discouragement. 

In  your  official  intercourse  with  the  president  and  directors,  observe 
great  deference;  and  at  the  "Board"  it  may  be  proper  to  address  the  for- 
mer by  his  title. 

Never  speak  of  the  real  or  supposed  fliults  of  character  of  a  director  in 
the  social  chcle,  nor  bear  tales  or  remarks  from  one  director  to  another. 


158  PRIZE    ESSAY    ON    BANTKING. 

Whatever  your  preferences,  likes,  and  dislikes — and  you  will  probably 
have  both — your  conduct  should  be  uniformly  respectful  to  all.  When- 
ever your  opinion  is  asked,  or  given,  without  sohcitation,  state  your  views 
modestly,  and  in  a  conversational  tone  of  voice.  Should  the  "Board"  differ 
from  you  in  judgment,  and  decide  contrary  to  your  convictions,  betray  no 
feeling,  but  promptly  and  cheerfully  execute  their  vote. 

Frequent  communications  with  the  directors,  relative  to  the  general  con- 
cerns of  the  bank  and  to  your  own  particular  duties,  will  be  of  essential 
service:  since  they  will  thus  obtain  a  knowledge  of  details,  and  you  will 
have  the  benefit  of  their  reflections  and  suggestions.  "  Conference,"  says 
the  wise  Lord  Bacon,  "  maketh  a  ready  man." 

Your  style  of  hving  is  a  matter  of  momentous  consequence ;  and,  possi- 
bly, the  hinge  on  which  your  final  destiny  will  turn.  Not  only  live  within 
your  income,  but  so  regulate  yoiir  expenses  that,  unavoidable  misfortunes 
or  sickness  excepted,  you  shall  be  sure  to  save  at  least  a  quarter  part  of 
your  salary,  as  a  fiind  fbr  old  age ;  unless,  indeed,  your  patrimonial  estate 
be  ample  for  such  a  purpose.*  But,  whatever  be  your  receipts  or  expecta- 
tions from  other  sources,  do  not  allow  your  expenditures  to  exceed  your 
personal  earnings.     Be  this  the  great  economic  maxim  of  your  life. 

Economy  is  the  parent  of  honesty,  of  freedom,  and  of  mental  ease  and 
quiet.     Poverty  can  never  enter  your  abode,  if  content  with  satisfying  your 

*  I  designed  to  aay  a  word  in  the  text  on  the  subject  of  salaries.  As  a  general  rule, 
the  compensation  to  bank  officers  is  too  small.  Accoriling  to  a  return  to  Parliament, 
in  1832,  the  number  of  persons  employed  in  the  Bank  of  England  and  its  branches,  was 
nine  hundred  and  forty,  who  (to  average  the  salaries)  received  only  £225,  or  about 
eleven  hundred  dollars  each,  per  annum.  Since  several  who  filled  the  higher  poits 
were  paid  very  much  larger  sums,  it  is  evident  that  a  considerable  part  of  this  nume- 
rous corps  could  not  have  received  more  than  a  moiety  of  the  above  average.  Yet,  as 
at  the  same  time  tUere  were  one  hundred  and  niuety-three  on  the  pension  list  who  en- 
joyed annually  (on  the  average)  £101,  or  about  eight  hundred  dollars  each,  the  faithful 
officers  of  that  institution  who  were  then  in  actual  service,  oould  hope  for  relief  in 
their  declining  years.  In  the  United  States,  the  system  of  pensions  is  not,  perhaps, 
practicable  or  desirable.  But  since  marriage,  a  flock  of  little  ones,  the  owning  of  a 
house  unincunibered  with  mortgage,  and  a  choice  collection  of  books,  are  all  Virtue's 
sentinels,  directors  ought  always  to  have  reference  to  the  support  of  a  family  in  fixing 
the  compensation  of  their  executive  officers.  Indeed,  such  officers,  like  capable  and 
faithful  men  in  other  pursuits,  should  be  allowed  to  provide  something  for  old  age. 
It  is  fair,  I  suppose,  to  assume  that  the  expense  of  the  executive  department,  as  a 
common  thing,  is  not  far  from  one  per  cent,  on  the  capital  stock,  or,  in  the  proportion 
of  one  thousand  dollars  salary  to  one  hundred  thousand  dollars  capital.  If  this  be  so, 
it  is  manifest,  at  a  glance,  that  a  large  part  of  the  bank  officers  in  the  United  States  (as 
gentlemen  are  now  cmvpelled  to  live  both  in  city  and  country)  are  required  to  consult 
the  maxims  of  "  Poor  Richard"  every  day,  in  order  to  secure  a  moderate  competence. 
The  interests  of  stockholders  are  not  promoted,  in  the  long  run,  by  low  salaries ;  for 
low  salaries,  not  infrequently,  as  experience  shows,  induce  speculations  in  stocks,  and 
other  irregularities,  which  terminate  in  defalcation.  As  a  class,  bank  officers  are  not 
BO  well  paid  as  officers  of  railroads  and  manufacturing  establishments,  while  their 
duties  are  quite  as  responsible. 


PRIZE    ESSAY    ON    BANKI-NO.  159 

real  wants ;  while  you  will  never  enjoy  independence,  if  you  live  in  accord- 
ance with  the  world's  caprice.*  If  you  possess  an  inordinate  craving  for 
great  wealth,  or  a  desire  to  indulge  in  luxuries  and  amusements  such  aa 
men  of  fortune  alone  can  aflbrd,  you  have  mistaiven  your  profession,  and 
should  abandon  it.  For  your  life,  if  you  remain  in  it,  will  be  a  perpetual 
struggle  against  your  natural  inclinations ;  and  tiie  danger  is,  that,  tinully 
yielding  to  tliem,  you  will  involve  yourself  in  irretrievable  woe. 

The  road  to  disgrace  is  short.  Persons  who  have  traced  the  footsteps  of 
more  than  one  unhappy  bank  officer  that  has  trodden  it,  have  found  that 
Extravagance  and  Defalcation  wore  but  a  few  strides  apart.f  A  sen- 
sual man  is  disciualilied,  by  his  very  physical  organization,  for  any  office 
in  the  executive  department  of  a  bank,  and  ought  no  more  to  be  there  than 
in  a  pulpit.  I  make  the  remark  considerately — for  good  reasons — and 
not  to  round  out  a  period.  And  should  this  P]ssay  meet  the  eye  of  the 
father  of  a  son  readj--,  by  age  and  education,  to  enter  upon  some  employ- 
ment, I  venture  to  counsel  that,  if  banking  be  thought  of,  the  moral  quali- 
ties and  the  strength  of  the  appetites,  as  developed  in  early  life,  are  the 
first  things  to  be  considered.  The  youth  who,  in  cliildhood,  stole  slyly  to 
the  closet  for  his  mother's  sweetmeats,  who  was  never  content  at  table 
with  the  share  of  niceties  allotted  to  him,  who  shirked  his  known  tasks,  and 
imposed  their  performance  upon  a  younger  and  more  dutiful  brother,  and 
who,  as  years. wore  on,  evinced  a  disposition  to  rely  upon  others,  and  to 
earn  nothing  for  himself]  but  yet  who  showed  a  determined  purpose  to  feed 
on  the  best,  and  to  dress  in  the  finest — such  a  youth,  though  as  quick  at 
figures  as  Colburn  himselfj  should  never  be  placed  in  a  bank. 

"  Speculation  in  stocks"  is  another  fruitful  source  of  ruin,  and  I  can  not 
forbear  a  word  of  admonition.    The  careful  investment  of  your  earnings  or 

•  The  great  English  banker,  Thellusson,  who,  at  one  time,  was  partner  with  Mr. 
Neekar,  the  celebrated  French  financier,  left  three  sons,  and  a  fortune  of  three  and  a 
half  millions  of  dollars,  which  estate,  he  said,  he  acquired  by  "industry  and  honesty." 
In  his  will  he  remarks :  "  It  is  my  earnest  wish  and  desire  that  mij  sons  avoid  ostenta- 
tion, vanity,  and  pompous  show,"  etc.  The  three,  it  may  be  added,  became  members 
of  the  House  of  Commons,  and  the  eldest,  a  peer  of  the  realm. 

t  "  The  London  banker  of  the  old  school,"  says  Lawson,  "  had  little  resemblance  to 
the  modern  gentleman  who  is  known  by  the  same  title.  He  was  a  man  of  serious  man- 
ners, plain  apparel,  the  steadiest  conduct,  and  a  rigid  observer  of  formalities.  As  you 
looked  in  his  face,  you  could  read  in  intelligible  characters  that  the  ruling  maxim  of 
life,  the  one  to  which  he  turned  all  his  thoughts  and  by  which  he  shaped  all  his  ac- 
tiiins,  was :  '  Tliat  he  who  would  be  trusted  with  the  m,oneij  of  other  men  should  look  as 
if  he  deserved  the  trust,  and  he  an  ostensible  pattern  to  societi;  of  probity,  exactness, 
frurjality,  and  decorum,.'"  And  further,  says  the  same  writer:  "  The  fashionable 
society  at  the  West  End  of  the  town,  and  the  amusements  of  high  life,  he  never  dreamed 
of  enjoying,  and  would  have  deemed  it  nothing  short  of  insanity  to  imagine  that  such 
an  act  was  within  the  compass  of  human  daring,  as  that  of  a  banker  lounging  tor  an 
evening  in  Fop's  Alley  at  the  opera,  or  turning  out  for  the  Derby  with  four  grays  to 
his  chariot,  and  a  goodly  hamper  swung  behind,  well  stuffed  with  perigord  pies, 
spring  chickens,  and  iced  champagne," 


160  PRIZE    ESSAY    ON    BANKING. 

patrimony,  and  a  similar  service  for  friends  and  customers,  define,  in  my 
judgment,  the  general  limits  of  your  operations  in  the  stock  market  To 
say  nothing  of  the  hopes  and  fears  consequent  upon  the  adventures  of  a 
dealer,  and  nothing  of  tlieir  influence  upon  your  mind  and  temper — already 
sufficiently  tasked — I  may  ask,  in  all  seriousness,  What  assurance  have  you, 
what  assurance  can  you  have,  that  your  virtue  wiU  resist  the  temptations 
sure  to  beset  you?  Once  embarked  and  afloat  on  the  stock-exchange, 
either  alone  or  with  partners,  you  can  not  move  without  means :  and  who 
sliall  answer  for  the  money  intrusted  to  your  care  ?  Who  shall  answer  that 
you  will  not  "borrow"  from  your  vault — as  others  have  done — feeling  sure 
that  you  can  "return"  the  sum  you  need  "in  a  few  days,  with  interest?" 
At  the  outset  you  will  not  "risk  much ;"  you  desire  only  "to  gain  some- 
thing to  add  to  a  moderate  salary."  But  encouraged,  at  length,  by  your 
own  success  in  small  operations,  or  excited  by  the  real  or  reported  good 
fortune  of  those  around  you,  the  resolution  may  be  formed  to  win  a  com- 
petence at  a  single  cast  of  the  die:  you  lose,  and  are  ruined  1  Be 
warned,  I  entreat,  Ln  time.  No  bank  officer — in  charity,  we  may  believe — 
ever  meant  to  be  a  defaulter;  no  one,  at  the  beginning  of  an  irregular 
course,  thought  defalcation  and  disgrace  possible.  Yet,  alas  for  the  many 
victims  of  self-deception !  alas  for  the  self-confident,  and  for  those  who  neg- 
lected the  great  duty  of  self-examination !  Most  aSectionately  and  earnestly 
do  I  charge  you,  as  you  value  3'our  peace,  as  you  would  save  your  integrity, 
as  you  would  not  be  driven  forth,  a  broken  and  sliunned  man,  to  resist 
every  seduction  of  avarice  from  within,  and  every  solicitation  of  companions 
from  without.  No  matter  what  pretense  or  excuse  a  stifled  conscience  may 
allow  you  to  frame,  (he  cash  in  your  vault  is  not  your  cash,  and  you  touch  il 
for  your  private  benefit  or  relief  even  as  a  robber,  and  at  the  peril  of  your 
soul !  Think,  ere  you  yield,  of  the  long  roU  of  sad-faced  men  who  once 
were  honored  and  trusted,  but  who,  when  tempted,  fell !  Think  of  those 
who,  wrecked  in  character,  in  fortune,  and  in  hope,  have  become  bloated, 
ragged  wanderers  I  Think  of  those  of  whom  fothers  and  mothers,  and 
even  wives  and  children,  dare  not  speak  save  in  whispers,  and  at  the  family 
fireside  I  Think  of  those  who  have  been  hurried  to  the  prisons  and  to  the 
tribunals  1     Think  of  the  graves  of  the  suicides  I 

A  single  warning  more,  and  I  pass  to  less  painful  topics  of  discourse. 
Allow  no  customer  to  overdraw  his  account  upon  your  own  responsibility, 
or  without  the  express  sanction  and  authority  of  directors.*  The  habit  is 
a  bad  one,  every  way,  under  any  circumstances ;  and  I  wish  it  could  come 
to  an  end  at  once,  everywhere  and  forever.  But  if  it  be  permitted  in  par- 
ticular cases  in  your  bank,  have  neither  part  nor  lot  in  the  matter,  save  to 
execute  a  positive  order.  Discourage  the  practice  in  every  possible  man- 
ner, and  if  fortunate  enough  to  put  an  end  to  it,  you  will  deserve  the 

•  I  believe  that  no  customer  of  the  Bank  of  England,  whatever  Ma  rank,  is  allowed 
to  overdraw. 


PRIZE    ESSAY   ON    BANKING.  IGl 

praise  of  every  correct  banker  in  the  country.  At  your  post,  and  in  bank 
hours,  you  are  to  have  no  friends  to  indulge  with  fUvors,  no  enemies  to 
punisli  with  refusals.  Then  and  there  all  men  should  be  alike  to  you.  The 
motto  of  the  "  Bankers'  Magazine"  should  be  yours,  without  reservation  or 
condition.*  In  fine,  perform  no  act  that  you  would  omit  in  the  presence 
of  the  full  "Board,"  or  in  that  of  the  sureties  on  your  official  bond.  This 
rule  will  carry  you  safely  through  every  difficulty  and  every  temptation. 

Pardon  me  if  I  now  suggest  the  importance  of  maintaining  a  reputation 
for  strict,  exact  veracity.  An  aged  judge  is  said  to  have  remarked,  iron- 
ically, that  "half  the  cases  he  had  tried  on  the  bencn  arose  from  ^good 
understanding^  between  the  parties;"  and  by  this  he  meant,  that  half-made 
bargains  and  agreements  lead  to  disagreement  and  litigation.  Avoid  mis- 
understandings from  this  source.  Many,  indeed  most,  of  your  transactions 
will  be  upon  verbal  contracts.  But  you  may  use  words  so  terse,  so  pre- 
cise, that  misconception  will  be  hardly  possible. 

The  honor  of  a  cashier  and  the  honor  of  a  woman  are  alike.  Suspicion 
of  either  in  the  public  mind  is  as  fatal  to  reputation  as  convicted  guilt. 
Stand  by,  stand  for  your  honor,  then  against  all  comers,  and  to  the  last. 
Preserve  your  own  respect,  though  you  be  fed  by  the  hand  of  public  or  of 
private  charity.  Napoleon,  at  the  hour  of  his  downfall,  deposited  the  re- 
mainsf  of  his  fortune  with  LaSitte,  and  refused  an  offered  and  customary 
certificate,  saying :  "  I  KNOW  YOU — I  hold  you  to  be  an  honest  man." 
The  Paris  banker,  in  the  course  of  events,  became  a  cabinet  minister ;  but 
such  a  testimonial  to  his  probity  from  a  man  whose  estimate  of  human 
virtue  was  too  low  to  be  just,  and  who,  at  the  moment  he  uttered  it,  was, 
as  he  imagined,  the  victim  of  faithlessness  and  trcacherj^,  will  be  remem- 
bered when  the  records  of  his  political  honors  are  torn  and  scattered.  But 
yet,  any  man,  in  his  own  circle,  may,  if  he  wUl,  have  it  said  of  him :  "  I 
know  you — I  hold  you  to  be  an  honest  man."  My  young  friend — 
now  starting  upon  a  banker's  career — bum  these  words  deep  into  j^our 
memory  1 

As  in  some  things  there  are  marked  distinctions  between  banks  in  differ- 
ent sections  of  the  country,  and  between  country  and  city  banks  in  the 
same  State,  and  corresponding  differences  in  the  duties  of  a  cashier,  it  is 
obvious  that  no  series  of  "  suggestions"  can  be  alike  applicable  to  aU.  But 
I  may  still  hope  that  the  young  and  inexperienced  officer  will  not  fail  to  find 
some  useful  hints  in  the  preceding  remarks,  whatever  his  particular  position 
or  special  charge. 

And  while  this  may  be  so,  the  country  cashier  may  yet  need  cautions 
and  recommendations  adapted  to  his  peculiar  official  and  social  relations. 

•  "  No  expectation  of  forbearance  or  indulgence  should  be  encouraged.  Faror  and 
benevolence  are  not  the  attributes  of  good  banking.  Strict  justice  and  the  rigid  por- 
foTTiiance  of  contracts  are  its  proper  foundation." 

t  Fire  millions  of  francs. 


162  PRIZE    ESSAY    ON    BANKING. 

Such,  then,  as  I  deem  the  most  important,  I  shall  briefly  and  respectfully 
offer.  First,  as  it  sometimes  happens  that  the  person  selected  for  the  ex- 
ecutive department  has  had  little  or  no  experience  in  banking,  and  is  to  bo 
connected  with  directors  whose  knowledge  is  as  limited  as  his  own,  the  duty 
of  consulting  well-informed  oflBcers  of  city  banks  is  manifest.  The  country 
cashier  is  often  alone.  Without  paying  or  receiving  tellers,  book-keeper, 
or  discount  or  collection  clerks,  but  invested  with  the  functions  of  all,  skill, 
system,  and  an  economical  use  of  time,  are  indispensable  to  success.  I 
have  known  gentlemen  who,  though  possessing  quick  and  clear  perceptions, 
and  almost  every  other  natural  endowment,  were  still,  at  the  time  of  their 
election,  incapable  of  opening  or  of  properly  keeping  a  single  bank-book. 
Some  of  these,  remarkably  cautious  in  their  habits  of  business,  and  profit- 
ing by  mishaps,  escaped  serious  losses,  and,  in  the  end,  became  accomplished 
officers;  while  others,  more  sanguine  in  temperament,  and  more  self-con- 
fident, and  unwilling  to  seem  novices,  involved  themselves  in  difficulties 
which  caused  them  much  mental  disquietude  and  pecuniary  embarrassment. 
Now,  it  is  apparent  at  a  glance,  that  both  classes,  had  they  started  right, 
might  have  avoided  a  great  deal  of  painful  experience. 

I  commend  to  you,  therefore,  if  not  bred  to  banking,  the  sources  of  inform- 
ation which  are  open  to  you,  and  to  all  who  desire  to  increase  their  knowl- 
edge. Accuracy  in  the  count  of  money  is  the  first,  accuracy  in  the  keeping 
of  accounts  is  the  second,  quahfication  in  a  country  cashier ;  and,  while  you 
may  acquire  the  first  by  practice,  you  may  go  ^\Tong  with  your  records  all 
your  life. 

A  small  bank  should  be  conducted  on  a  plan  as  systematic  and  as  regular 
as  a  large  on.  Experience  has  shown,  I  think,  that  bank  accounts  should 
be  kept  in  "double  entr}',"  and  that  each  department  of  bank  business  re- 
quires a  separate  book.  Thus,  in  an  institution  with  a  capital  of  only  fifty 
thousand  dollars,  I  consider  that  a  general  and  a  deposit  loger,  that  books 
for  cash,  deposits,  discounts,  credits,  collections,  and  trial-balances,  are  as 
essential  as  in  one  of  a  million  of  dollars.  And  the  same  remark  is  true 
of  stockholders'  and  directors'  records,  of  a  book  to  show  the  state  of  the 
bank,  and  of  another  to  exhibit  the  paper  to  mature  in  any  given  week. 

The  general  and  the  deposit  leger  may  be  one ;  the  former  occupying 
some  seventy-five  or  one  hundred  pages,  and  embracing  accounts  with 
things,  the  latter  with  persons.  The  cash  should  be  settled  daily  at  the  close 
of  business,  when,  also,  a  trial  balance  should  be  taken  of  the  general  leger 
postings.  On  tlie  last  business  day  of  the  month,  the  depositors'  accounts 
should  be  adjusted,  and  the  balance  of  each  be  transferred  to  the  trial- 
balance  book  to  ascertain  whether  the  deposit  leger  has  been  correctly 
posted.  The  daily  settlement  of  the  cash — neglected  in  some  country 
banks,  unless  the  reform  has  been  very  recent — need  occupy  but  a  few 
minutes,  since  a  vault-book,  accurately  kept,  leaves  for  actual  count  the 
cash  in  drawer  only.     "Memorandum  checks,"  and  similar  vouchors — to 


PRIZE    ESSAY    ON    BANKING.  103 

say  nothing  of  the  grave  consequence3  which  sometimes  result  from  their 
use — are  great  pests  in  a  cashier's  drawer,  and  should  not  be  allowed  there, 
except  in  the  most  urgent  cases.  Some  cashiers  keep  "  ragged  bills,"  never 
intended  to  be  reissued,  in  vault  for  months,  and  even  years;  but  the 
practice  is  attended  with  obvious  risk  and  inconvenience,  and  should  not 
exist. 

As  already  intimated  in  another  connection,  your  directors,  however 
worthy  and  respectable  as  citizens  and  gentlemen,  may  be  poorly  versed  in 
the  science  of  banking,  and  may  not,  at  first,  appreciate  the  force  and  the 
reason  of  the  rules  which  you  deem  necessary  to  adopt,  in  transactions 
with  them  and  with  others.  But  evince  no  impatience.  I  assume  that  a 
majority  of  any  and  of  every  "Board"  are  men  of  honor,  and  mean  to  do 
right;  aod  that,  in  explanations  and  conversations  with  yours,  you  have 
but  to  calmly  jx)int  out  the  evils  likely  to  arise  from  a  course  opposite  to 
that  which  you  insist  upon,  to  obtain  their  approbation.  Yet  you  yourself 
should  be  well  assured  that  these  rules  are  consonant  to  law,  or  are  such  as 
are  imposed  in  well-regulated  banks,  or  such  as,  in  your  peculiar  position 
and  relations,  are  imperatively  demanded. 

It  is  possible  that  your  predecessor  allowed  improper  indulgences  to  a 
particular  director,  or  had  favorites  among  your  customers,  and  that  you 
will  feel  constrained  to  put  an  end  to  these  and  to  similar  uregularities.  To 
accomplish  this,  in  harmony,  will  require  all  the  wisdom  and  good-nature 
that  you  can  command.  It  is  possible,  too,  that  overtures  may  be  made  to 
you  to  grant  favors  inconsistent  with  your  duty ;  but,  as  such  cases  will 
arise  from  thoughtlessness  or  ignorance,  aa  often  as  from  unworthy  motives, 
you  should  be  silent,  except  when  corrupt  intentions  are  too  apparent  to  be 
mistaken,  or  the  importunities  of  the  same  person  become  so  frequent  as  to 
be  troublesome. 

The  customers  of  a  country  bank,  unlike  the  merchants  of  large  and 
busy  cities,  expect  of  the  cashier  some  inquiries  about  their  families,  and 
remarks  upon  the  news  of  the  day,  upon  the  crops,  the  weather,  and  otht-r 
matters  of  personal  or  local  interest.  To  a  reasonable  extent  this  expecta- 
tion should  be  gratified.  But  discussions  across  your  counter  on  topics  of 
eectarian  theology  and  party  politics  are  to  be  avoided — entirely  a\'oidcd. 
Nor,  if  you  hear,  should  you  reply  to,  or  take  part  in,  tales  of  scandal  and 
neighborhood  gossip.  Polite  to  all,  sociable  to  a  degree  not  to  interfere 
with  your  duties,  inviting  and  giving  friendly  greetings,  your  deportment  is 
yet  to  be  dignified,  and  such  as  becomes  a  well-bred  gentleman. 

Ton  will  transact  business  with  persons  who  can  not  even  write  a  note  of 
hand  in  proper  form ;  with  those  who  can  not  be  made  to  acknowledge  the 
necessity  of  a  notice  to  an  indorser ;  and  with  those  who  wUl  pertinaciously 
ijosist  upon  having  their  own  way,  whatever  your  reasoning  or  objections 
to  the  contrary.  Teach  the  ignorant,  without  givuig  them  pain  ;  be  firm 
with  the  self-willed,  without  evincing  impatience  or  anger;  fur  the  smart 


164  PRIZE    ESSAY    ON    BANKING. 

of  a  sharp  word,  or  of  a  proud  toss  of  the  head,  is  sometimes  felt  for  yeani. 
"Contempt,"  says  an  Eastern  proverb,  "will  penetrate  the  shell  of  a  tor- 
toise;" be  sure  to  remember,  that  it  will  pierce  deeper  into  the  epidermis 
of  a  fellow-man. 

To  require,  and  to  insist  upon,  regular  bank  hours  will  occasion  scmie 
difficulty  in  some  places.  People  whose  business  at  banks  is  rare,  seem  to 
forget  that  a  cashier,  hke  other  men,  has  a  love  of  fresh  air,  or  that  he  needs 
exercise  and  relaxation ;  and  thus  can  not  or  will  not  understand  why  he 
is  not  ready  to  accommodate  them  early  in  the  morning,  and  late  in  the 
evening.  These  persons  seek  him  in  his  moments  of  rest  and  recreation, 
asjk  him  to  receive  money  at  his  house,  or  in  the  village  stores,  and  com- 
plain if  he  refuses  so  reasonable  requests.  You  will  be  unjust  to  yourself  if 
you  submit  to  these,  or  to  similar  demands.  The  intervals  between  bank 
hours  are  yours  by  positive  contract,  and  by  the  very  necessities  of  your 
physical  and  mental  being.  Do  not  permit  inroads  upon  them,  save  in 
extraordinary  exigences;  in  tlieso,  leave  your  bed  even,  to  serve  a  cus- 
tomer. Still,  as  loose  and  unsafe  habits  may  have  been  encouraged  by 
your  predecessors,  or  countenanced  by  directors,  measures  of  reform  will 
be  odious,  unless  gradual.  Under  kind  and  considerate  treatment  your 
laggards  may  become  punctual,  and  untimely  requests  to  open  your  vault 
entirely  cease. 

A  single  "suggestion"  more.  The  private  and  social  relations  of  a 
country  cashier  are  of  consequence,  and  ought  not  to  be  overlooked.  And, 
first,  a  salary  officer,  under  ordinary  circumstances,  needs  not  to  be  in  debt 
for  his  personal  or  family  expenses ;  and,  as  cash  payments  are  sure  to 
show  whether  he  is  "  living  beyond  his  means,"  may  I  not  commend  the 
safe  rule  of  "paying  as  you  go?" 

Again,  may  I  not  be  allowed  to  suggest  the  duty  of  constant  attendance 
at  church,  even  though  you  can  not  worship  with  persons  of  your  own 
faith ;  and  also  of  manifesting  an  interest  in  schools,  public  lectures,  ly- 
ceums,  and  other  means  employed  to  promote  the  welfare  of  society?  The 
community  in  which  you  live  have  a  claim  upon  you,  not  only  for  an  ex- 
emplary life,  but  for  contributions  of  money  in  proportion  to  your  ability, 
to  aid  in  the  maintenance  of  the  religious,  literary,  and  benevolent  associa- 
tions established  among  them. 

To  conclude.  Should  it  be  thought  that  I  might  have  omitted  the  dis- 
cussion of  some  topics,  and  have  treated  others  with  greater  brevity,  I  sub- 
mit, with  deference,  that  I  have  endeavored  to  be  a  careful  observer.  More 
than  twenty-five  years  have  elapsed  since  the  commencement  of  my  connec- 
tion with  banks  and  banking ;  and,  as  I  now  look  back  and  recall  the  facta 
eUcited  by  judicial  inquiry,  and  the  facts  embraced  in  other  well-authenti 
cated  accounts  which  relate  to  bank  officers  who  have  fallen,  never  again 
to  rise,  or  whose  Uves  have  been  saddened  and  embarrassed  by  want  of 
firmness  in  resisting  the  allurements  of  pleasure,  or  the  solicitations  of  the 


PRIZE    ESSAY    ON    BANKING.  165 

companions  of  their  social  hours — hy  an  overweening  solf-confidenco — by 
too  great  faith  in  others ;  as,  too,  I  remember  the  complaints  against  an- 
other class,  who,  tliough  without  amoral  stain,  have  still  injured  themselves 
and  the  institutions  with  wliich  they  are  concerned  by  churlishness  and 
irritabiUty;  I  find  no  cautions  and  admonitions  to  omit,  no  recommendar 
tions  that  may  not,  I  think,  assist  in  forming  the  character  of  the  officer  for 
whom  these  suggestions  are  intended. 

A  single  word  more.  Many  of  the  cashiers  whoso  private  virtues  and 
professional  ability  adorn  the  annals  of  banking  in  the  United  States,  re- 
ceive salaries  nearly  oipial  to  the  emoluments  of  cabinet  ministers,  or  mili- 
tary officers  of  the  highest  rank,  and  are  intrusted  with  powers  so  ample, 
that  they  seem  to  be  private  bankers,  wielding  their  own  capital.  These 
gentlemen  have  attained  the  crowning  honors  of  their  profession.  Let  the 
"young  cashier"  aim  to  reach  the  same  eminence  among  men  and  aiiunig 
bankers.  Let  him  remember  that,  whatever  the  influence  of  friends  at  the 
outset  of  his  career,  his  position  in  the  maturity  of  his  years  must,  in  the 
very  nature  of  things,  depend  upon  himself,  upon  his  capacity,  his  courage, 
and  his  probity. 

I  have  here  spoken  to  him  as  to  my  only  son,  and  take  my  leave,  in  the 
earnest  hope  that,  m  the  labors  of  some  one  of  his  seniors,  communicated 
to  the  "Magazine"  upon  the  invitation  which,  perhaps,  I  have  unwisely 
accepted,  he  will  be  sure  to  find  a  path  marked  out  for  him  which  will  'o-iC 
him  to  the  rewards  of  a  well-spent  life. 


THB 

NUMISMATIC    DICTIONARY 

OR, 

COLLECTION    OF    THE    NAMES  OF  ALL   THE   COINS    KNOWN, 

FROM   THE   EARLIEST   PERIOD    UP    TO   THE   PRESENT 

DAY,     WITH     THEIR     COUNTRIES,     VALUES, 

MULTIPLES,   DIVISIONS,   ETC.,   ETC. 


ABACUS,  The  Roman  calculation  Table. 

ABASSI,  Persian,  Silver,  value  6d.     Qu.  Shahee. 

ABBEY   PIECES,  various  countries.  Brass,   possibly  current  for  smaC 

sums,  but  chiefly  used  in  computation  as  Jetons. 
ABRA,  Polish,  Silver,  value  Is. 

ABUQUELP  Egyptian,  Silver,  value  30  medhii,  Is.  6d.     See  Griscio. 
ACHESON,  Scots  Billon,  value  8d.,  named  Q'om  Atkinson,  mint  master. 
ACHTZEHNER,  Swedish,  Silver. 
ACKEY,  colonial.  Silver,  coined  in  1818. 

ACKIE,  Ashautee,  Gold,  value  5s.  4d.  fi-ora  Ackee,  seed  of  Guinea,  A£ 
AES,  Roman,  term  for  money  in  general,  Brass. 

AEFORTIATI,  Roman,  Senatorian  coins  of  the  12th  and  13th  centuries. 
AHMULAHS,  Abyssinian  salt  money,  various  sizes,  new,  20  to  a  DoUar. 
AIGNEL,  Anglo-GaUic,  Gold.     Bearing  the  Agnus  Del 
ALBERT,  Flemiali,  Gold.     Also  DoUars  and  Groschen. 
ALBUS,  German,  Copper,  value  12  Hellers,  at  Cassel,  Cologne,  etc. 
ALFAZZAT,  Persian,  SQver. 

ALLEVURE,  Swedish,  Copper,  the  smallest  value. 
ALMOND,  Ilindostan.     The  nut  is  current,  40  to  a  Pice.     See  Baddam. 
ALTIN,  Russian,  Silver. 

ALTMICHLIC,  Turkish,  Silver,  value  Ss.,  60  Paraa. 
ANGEL,  English,  Gold,  value  Gs.  8d.,  bearing  St.  Michael  and  Dragon. 
ANGELET,  English,  Gold,  the  half  Angel,  value  3a.  4d. 


NUMISMATIC    DICTIONARY.  107 

AlSTCrSTER,  Swiss,  Copper,  also  Rapp,  value  half  a  Rapen.     Zurich. 

ANKOSlOIi:,  Chiiisoruc,  a  Rupee  of  Silver,  current  in  the  Deccan. 

ANNA,  or  ANA,  liindostan,  Silver,  16  to  a  Rupee. 

APKRBIAS,  Maltese. 

ARCHER,  Persian,  Gold,  the  Daric. 

ARDITE,  Spanish,  Copper,  ancient  and  of  small  value.     Catalonia. 

ARMOODI,  Turkish,  Gold. 

AS,  Roman,  Brass,  value  varied,  literally  1  lb.  of  12  oz.,  but  reduced,  216 

B.  c,  to  one  ounce. 
AS  LIBRALIS,  As  Grave.     Other  names  for  the  weighty  As. 
ASHRUFFY,  Hindostan,  Gold,  value  12s.  6d.     Nepaul. 
ASPAR,  AsPRE,  or  Mina,  Turkish,  Silver.     120  to  a  Piastre. 
ASSIGNATS,  French  notes,  first  issued  April  19th,  1790. 
ASSARION,  Greek,  Brass,  rendered  farthing. 
ATTINE,  Polish,  Silver,  value  5d. 
AUGUST  D'ou,  Saxony,  Gold,  value  16s.  3d. 
AUREUS,  Roman,  Gold,  value  16s.  8d.     The  Bezant  also. 
AUTONOMOUS,  Corns  of  Cities  in  Greece,  enjoying  their  own  laws. 

B 

BAAT,  Siamese,  Silver,  value  2s.  6d.,  nut  shaped. 

BACHE,  Zurich,  Billon,  value  Ifd. 

BADDAM,  Hindostan,  the  almond  of   Persia,  current  on  the  Malabar 
coast. 

BAGATTINO,  Venetian,  Copper,  value  half  Soldi,  ^d. 

BAGOGLEE,  Persian,  Gold,  a  ducat.     Bajoglee. 

BAIOCCO,  Papal,  Copper,  value  |d. 

BAIOCHELLO,  Papal,  Billon,  single  value  Id.,  double  value  2d. 

BAHADRY,  Hindostan,  Gold,  the  Star  Pagoda,  in  the  Mysore,  so  called. 

BAJOIRE,  Genevese,  Silver,  value  4s.  6d. 

BANCO.  Genoese,  Bank  money.     The  word  Bank  is  derived  from  the 
Lombards,  the  Bench  for  transacting  business. 

BAND,  African,  weight  for  gold  dust,  2  oz. 

BANK  DOLLAR,  Hamburg,  Silver, 

In  England,  the  Spanish  Dollar,  re-stamped  and  issued,  as  a  Token, 
by  the  Bank,  in  1804. 

BARBONE,  Luccese,  Silver,  value  6d.     Qu.  Bearded  head. 

BARS,  Siamese,  Silver,  current. 

BARS,  W.  African,  Iron,  current. 

BASARMO,  Hindostan,  Tin. 

BASARUCO,  Hmdostan,  Tin,  Malabar  coast,  value  10  to  Id.,  see  Budge- 
rook. 

BATZ,  Swiss,  Copper  silvered,  v.alue  l|d.,  10  Rappen, 

BAWBEE,  Scots,  Copper,  value  ^d.     Qu.  Baa  Piece. 


108  NITMISMATIC    DICTIONARY. 

BEARD  COINS,  Russian  Copper.     Receipt  for  being  shaved. 

BEKA,  Jewish,  SUver.     The  half  Shekel.     Baka,  divided. 

BELL  DOLLAR,  Brunswick,  Silver,  D.  Augustus  1643,  with  and  without 

clapper. 
BENDA,  Ashantee,  Gold,  value  £10  13s.  4d. 
BENDIKY,  Morocco,  Gold,  value  9s. 

BENER-PEXXY,  Anglo-Saxon,  Silver,  given  in  charity.    See  Maerra, 
BESHLIE,  Turkish,  SUver,  value  Ss.  2d. 
BESTIC  or  Beslic,  Turkish,  Silver,  value  5  aspers,  3d. 
BEZANT.     The  B3'zantine  ducat.  Gold.     Also  silver  Bezantines,  Imperial 

coins  from  the  5th  century  after  Christ,  each  value  2s. 
BEZZO,  Venetian,  Copper,  value  Jd.     Bezzi  money. 
BIA,  Siamese,  Copper,  round  and  thick,  value  200  cowries. 
BIGATI,  Roman,  Silver,  the  denarius  bearing  a  two-horsed  car. 
BTGOTA,  ChUi,  Gold.     Qu.  Mustachio. 

BILLON,  coins  of  mixed  metal,  silver  and  copper.     Bas  Billon  the  worSl. 
BISTI,  Persian,  Silver,  value  2d. 
BIT,  the  Spanish  Real,  Silver,  in  Jamaica :  also  the  Portuguese  Testone , 

there  are  also  Half  Bits,  silver  cut  from  Dollars. 
BLACK  DOG,  St.  Christopher's,  BiUon.    The  Cut  DoUar,  also  so  called. 
BLACK  MAIL,  Scots  protection  money. 

Blanque  Maille,  French,  bad  Silver. 
BLACK  MONEY,  English,  the  Bas  Billon,  denounced,  temp.  Edward  L 
BLACK  PE  AKE,  Indian.     Rare  shells  strung,  value  2s.  6d.  a  cubit. 
BLAFFERT,  Cologne,  a  small  coin. 
BLAMUSER,  Westphalia,  money  of  account. 
BLANC,  French,  a  silver  coin,  value  4d. 

The  Ecu  Blanc,  the  French  crown  piece 
BLANC  A,  Spanish,  money  of  account  in  Malaga. 

BLANK,  EngUsh  Billon.     The  Gros  Blanc,  Anglo-GaUic,  temp.  Henry  YL 
BLANQUILLE,  Barbary,  Silver,  value  2id. 

BODLE,  Scots,  Copper,  the  half  Plack.     From  Bothwell,  mint  master. 
BOHMEN,  or  Bohemian,  Prague,  Silver,  value  3  Kreutzers. 
BOLOGNINO,  Luccese,  Billon,  value  Id.     Also  at  Bologna. 
BON-GROS,  Hesse-Cassel,  Silver,  value  2d. 
BONNET  PIECE,  Scots,  Gold,  temp.  K.  James  I.  from  the  Cap  then 

worn. 
BORAGE  GROAT,  Scots  Silver,  1467,  value  12d.     Qu.  From  Borax  used 

in  it. 
BORBT,  Egyptian,  Copper,  value  3  aspers.     Qu.  Burbi,  see  Bourbe 
BORDHALFPENNY,  paid  for  a  stall  in  a  market. 
BORJOOKES,  Abyssinian,  glass  beads,  current  for  small  money. 
BOS.     The  Greek  Didrachm^  Silver,  bearing  an  Ox. 
BOVELLA,  Persian,  Silver,  value  16s. 


NUMISMATIC    DICTIONART.  160 

BOUGES,  African,  cowries  are  so  called. 

BOURBE,  Barbary,  money  of  account  at  Tunis,  value  half  asper. 

BRABANT,  Engliyh,  Base  coin  temp.  K.  Edward  I. 

BRABANT  KRONE,  Austrian,  SUver,  value  4s.  6d.,  2g.  15k. 

BRACTIATE,  Roman,  and  other  coins,  impressed  on  one  side  only,  from 

Bractia,  a  spangle. 
BROAD  PIECE,  English,  Gold,  value  203.     The  Unit,  temp.  K.  James  I. 
BUDGEROOEl,  Hiudostan,  money  of  account  on  the  Malabar  coast,  6  to  a 

Pice. 
BUSHE,  Aix-la-Chapclle,  Copper,  value  4  Hellers. 
BUSSORA,  Crux,  Turkisli,  Silver,  value  16d. 

C 

CABESQUIS,  Persian,  Silver,  value  Id.     Casbesquis,  Kasbequis. 
CACAO,  Mexico,  Grains  current,  100  to  a  Medio,  3^d. 
CAGLIARESCO,  Sardinian,  Copper,  value  6  to  a  Soldi. 
CAHAUN,  Bengal,  Silver,  value  T^d.     Cahuse,  a  quarter  Rupee. 
CALDERILLA,  Spanish,  Copper,  the  Cuarto,  value  4  Maravedis. 
CANDARINE,  Chinese,  money  of  account.     100  to  a  Tael,  value  fi 
CANTEROY,  Hindostan,  The  Sultany  Fanam,  so  called  Ln  the  Mysore. 
CAPELLONK,  Modena,  Silver,  value  3d. 
CARAT,  Arabian,  a  small  coin  of  very  base  silver  at  Mocha. 

The  carat  weight  for  gold,  named  from  the  red  bean  of  Abyssinia,  the 
fruit  of  the  Kuara.     4  grains. 
CARAGRONCH,  Mod.  Greece,  SQver,  value  53. 
CARD  ECU,  French,  Silver,  the  quart  D'Ecu,  so  called  in  England. 
CARIVAL,  Bombay,  valued  12  Pice. 
CARL  D'Or,  Brunswick,  Gold,  value  16s.  4d. 
CARLINO,  Sardinian,  Gold,  value  £l  18s.  lOd. 
CARLINO,   Italian,    Silver,  value  5d.     Coined    first   in   1490,   by  King 

Charles  YIII.  of  France. 
CARLO,  Lombardy,  Silver,  value  53. 
CAROBA,  Barbary.     A  coin  of  Tunis. 
CAROLIN  D'Or,  Bavarian,  Gold,  value  £1  Os.  8d. 
CAROLINE,  Swedish,  Silver,  value  Is.  6d. 
CAROLUS,  Enghsh,  Gold,  value  23s.    The  Laureat,  temp.  King  Charles  TL 

Cabube  money  of  account  in  Algiers. 
CASH,  Chinese,  Brass,  coins  for   stringing,  cast,   1000  Cash,  100  Caad;*- 

rines,  10  Mace=-1  Tael.     See  Tseen. 
CASTILLON,  Spanish,  Gold,  probably  from  bearing  the  arms  of  Castile. 
CASTELLANO,  Spanish,  Gold,  the  ancient  coin. 
CATI,  Chinese,  value,  16  Taels,  or  £5  6s.  8d.     Also  Catty. 
CAVALIER,  Swedish,  Silver. 
CAVALLO,  Sardinian,  Billon.     CavaUi  and  Cavallucci,  Naples. 


1^0  NUMISMATIC    DICTIONARY. 

CAVALLOTTO,  Genoese,  Billon,  value  2(L 

CAVEER,  Arabian,  money  of  account  at  Mocha.     40  to  a  Dollar. 
Cabeer  or  Carear,  value  l:i-d. 

CENT,  Dutch,  Copper,  100  to  a  Guilder. 

CENT,  American,  Copper,  100  to  a  Dollar. 

CENTIME,  French,  Copper,  100  to  a  Franc;  also  in  Belgium  and  Ionian 
Islands. 

CENTESIMO,  Italian,  Copper.     Lombardy,  value  one-twelfth  of  a  penny, 
100  to  a  Lira. 

CENTESSIMO,  Copper,  Uruguay 

CENTUSSIS,  Roman,  100  As,  value  in  account  40  Sesterces  10  Deniers,  or 
6s.  3d. 

CHAISE,  Anglo-GaUic,  Gold,  temp.  K.  Edward  III. 

The  French  coin  of  Philip  le  Bel,  the  Royal  Dur,  hard  coin. 

CHALCUS,  Greek,  Brass.     The  earliest  of  that  metal.     431  B.C. 

CHALLIES,  Ceylon,  Copper,  value  4  to  a  farthing.     From  Chally,  Cop- 
per. 

CHAPPEE,  East  Indies,  Silver.     The  Rupee,  when  marked  or  chopped. 

CHAYE,  Persian,  Silver.     The  Shaki,  value  6d. 

CHEDA,  Tartary,  Tin. 

CHEGO,  Portuguese,  a  weight  for  gold,  4  carats. 

CHELON,  Polish,  Billon. 

CHEQUIN,  Turkish,  Gold,  value  9s.  6d. 

CHERASIS,  Persian,  Gold,  various  value.     The  Tela,  a  medal 

CHID  A,  Hindu,  Tin,  when  round,  value  +d.,  but  if  octagonal,  value  2d. 

CHOUSTACK,  Polish,  Billon,  value  2d. 

CHRISTIAN,  Danish,  Gold,  value  16s.  5d. 

CHRISTINE,  Swedish,  Silver,  value  Is.  2d, 

CINQ  FRANCS,  French,  Silver,  value  nearly  4s. 

CrNQUINO  Neapolitan. 

CISTOPHORUS,  Greek,  SOver,  bearing  the  Cista,  or  Chest,  of  Bacchus. 
Ancient  Cistophori,  of  cities  in  Asia.     Tri-drachms. 

CLACO,  Mexican.     Elaco. 

CLOTH,  Abyssinia.     Blue  Surat  cloth,  a  cubit  in  length,  folded  in  a  three- 
cornered  packet,  value  half  a  dollar.     See  Wadmal. 

CO  All  MONEY,  British,  found  at  Kimmeridge,  coast  of  Dorsetshire ;  it  is 
not  quite  proven  that  this  was  money. 

COB,  Spanish,  Silver,  the  Duro,  or  hard  DoUar,  in  Gibraltar,  so  called. 

COCKIEN,  Japanese,  value  £10. 

COINS,  probably  originally  tokens  given  at  Temples.     Tlie  earhest  are  of 
religious  character  in  the  devices. 

COLON  ATO,  Spanish,  Silver,  the  Pillar  Dollar  is  so  called. 

COLONIAL  COINS,  Greek  money  struck  for  the  Roman  Colonies;  uho 
English,  struck  for  Canada,  the  Indies,  etc. 


NUMISMATIC    DICTIONARY.  I7l 

COLOGNE,  the  Mark  of;  Weight,  the  Standard  of  Germany,  8  oz.  Troy. 

COMMASSEE,  Arabian,  Copper,  but  contains  a  little  silver.  60  to  a  dol- 
lar at  Mocha. 

CONDOR,  Chili,  Gold,  10  Pesos,  value  £1  17s.  3d. 

CONDORIN,  Japanese,  Copper,  value  fd. 

CONSTITUTION  COINS,  Germany,  about  1738. 

CONSULAR  COINS,  Roman,  Silver,  Denarii  struck  under  the  Govern- 
ment of  Consuls.     Family  Medals. 

OONTO,  Portuguese,  computation.     1000  Millreis. 

CONTORNIATI,  Roman,  Tickets,  not  current. 

CONVENTION  COINS,  German,  about  1763,  also  1848. 

COPFSTUCK,  Austrian,  Silver,  value  9d.,  20  Kreutzers.     Copstick. 

COPANG,  Japanese,  Gold,  value  £2  4s.  2d.  Also  Silver,  4s.  6d.  Qu. 
Cubans. 

CORNADO,  Spanish,  Copper,  value  smaU.  "No  vale  un  Coruado,"  is, 
"  not  worth  a  farthing." 

CORONILLA,  Spanish,  Gold.     Yientin  D'Oro,  value  20  Reals. 

COURONNES  DU  SOLEIL,  French,  Gold,  1546,  current  in  England,  as 
Crowns  of  the  Sun,  temp.  K.  Edward  VI. 

COWRIES,  Bengal  and  Africa,  small  shells  from  the  Maldives. 

COZ,  Persian,  Copper,  value  10  to  a  Shaki.     Coz  Bagues. 

CRAZIA,  Tuscan,  value  f  d.     An  old  coin. 

CREUTZER,  or  Crcttzer.     See  Kreutzer. 

CRIMBAL,  W.  Indies,  Silver,  value  7id.     The  Isle  du  Vent.     Bit. 

CROAT,  Spanish,  Silver.  The  Gros  D'Argent  of  Arragon,  origin  of  En- 
glish Groat. 

CROCARD,  English,  Base  coin,  temp.  K  Edward  I. 

CROCIATO.  Genoese,  Silver,  named  from  the  arms.  The  Croisat,  value 
4s.  4d. 

CROON,  Flemish,  Silver. 

CRORE,  Bengal  computation,  100  Lacs,  or  10  million  Rupees. 

CROSS,  all  money  bearing  a  cross.  The  Cross  Dollar,  of  Spain,  bears  the 
Burgundy  cross. 

CROWN,  English,  Gold,  temp.  K.  Henry  VIII.  Crowns  of  the  double 
rose.  Thistle  Crowns. 

CROWN,  English,  Silver,  temp.  K.  Edward  VL,  value  5s. 

CRUCIIE,  Swiss,  BiUon,  value  id. 

CRUSADO,  Portuguese,  Gold  and  Silver,  various  value,  the  Crusado  Novo, 
Silver,  value  2s.  2d. 

CU,  thin  Brass,  bearing  a  snield ;  the  Ecu,  half-farthing. 

CUARTA,  Spanish,  Copper,  value  4  Maravedis,  the  Calderilla. 

CUFTC  COINS,  Arabian,  named  from  Kufa,  on  the  Euphrates. 

CUNETTI  COINS,  Anglo-Saxon,  Silver.  Pennies  struck  at  Cunctium, 
Marlborough. 


1V2  NUMISMATIC    DICTIONARY. 

CUT  MONET,  Brazilian,  Silver.     Plata  ifacuquina. 
CZARSONITCII,  Russian,  Gold,  value,  9s.  3d. 

D 

DAELDER,  Dutch,  SUver,  value,  2s.  6d. 

DAEZAJIB,  Persian,  Silver,  value,  5a. 

DAHAB,  Abyssinian,  Silver.     See  Har£ 

DALER,  Swedisli,  the  SOver,  is  SUfermynt :  the  Copper,  Kopparmynt. 

DALER  RIX,  value  3s.  8d.     See  Dollar. 

DAMA,  Hmdu,  Copper.     Nepaul. 

DANAJO,  Lombardy,  Copper ;  or  Danajnolo,  the  smallest  money.    Danaro. 

DANDY  PRAT,  English,  Silver,  temp.  K.  Henry  YII.  dwarf  coin. 

DANE  MONEY,  Roman  coins  found  in  Northamptonshire,  so  called. 

DANIM,  Arabian,  current  at  Bussora,  value,  ^d. 

DARIC,  Persian,  Gold,  named  from  Darius.     Greek  Darics. 

DECIME,  French,  Copper,  value,  Id.,  the  tenth  of  a  Franc. 

DECIMO,  La  Plata,  Copper,  value,  ^d.,  the  tenth  of  a  Medio. 

DECUPLO,  Sicilian,  Gold. 

DECUSSIS,  Roman,  Silver,  marked  X.  10  Asses,  same  as  Denarius. 

DENAING,  Russian,  Copper.     Copecs  or  Pence, 

DENAR,  Silesia,  Copper,  the  Pfening  of  Breslau. 

DENARIUS,  Roman,  Silver,  marked  X.  Denos  JEres,  value,  8d. ;  it  was 
lowered  both  in  weight  and  value. 

DENARIUS,  Anglo-Saxon,  as  Denarii  S.  Petri,  the  Peter  Pence,  a  golden 
Denarius,  temp.  K.  Henry  III. 

DENARO,  Italian,  money  of  account,  value,  one  24th  of  a  penny. 

DENGA,  Russian,  Copper,  the  half  Copec.     Also  Dengop  and  Denushka. 

DEMY,  Scots,  Gold,  like  the  Enghsh  half  Noble.  There  are  Demi- 
Pistoles,  Louis,  and  Sequins  in  Gold. 

DENIER,  French,  Copper,  the  twelfth  part  of  a  Sou.  Also  Swiss,  the 
Deniers  d' Argent,  ancient  coins,  also  the  Deniera  D'Or;  The  Double 
Denier,  Anglo-Gallic,  both  of  Silver,  and  Billon. 

DENIER  DE  GROS,  Flemish,  the  Groote,  or  Penny. 

DENUSHKA,  Russian,  Copper,  the  half  Copec. 

DERHEM  SEGAR,  Barbary,  Copper. 

DERLINGUE,  Venetian,  Silver,  half  the  Scudo. 

DEVIL'S  HEAD  MONEY,  Chinese,  SUver.    Spanish  Dollars,  so  called. 

DICHALCOS,  Greek,  SOver,  the  smallest  com. 

DICKENS,  Swiss,  Silver. 

DIDBACHM,  Greek,  Gold,  the  Stater  Aureus,  or  Philippus. 

DIME,  American,  Silver,  value,  the  tenth  of  a  Dollar,  5d. 

DINAR,  Arabian,  Gold,  value,  8s.     Denar. 

DINERO,  Spanish,  money  of  account.     "Tener  dinero,"  to  be  riclu 
DiNERAL  and  Dinekada,  a  largo  sum  of  money. 


NUMISMATIC    DICTIONART.  173 

DINERUELO,  Spanish,  Copper,  current  in  Arragon. 

DIRUEM,  xVrabian,  Silver. 

DITTO  BOLO,  Ionian  Islands,  Copper. 

DIWANI,  Abyssinian  money. 

DOBRAO,  Portuguese,  Gold,  value,  £6  14s.,  the  Dobra. 

DOBLON,  or  Doubloon,  Spanish,  Gold,  value,  5  Dollars ;  the  Doblons  do 

Acuatra,  and  De  Ocho,  are  value,  8  and  16  Dollars. 
DOBLON,  Mexican,  the  gold  onza,  value,  £3  4s. 
DODEE,  Bengid,  Copper,  tht  half  Pice.     Doudou.     Dudu. 
DODKIN,  Enghsli,  Copper,  the  small  Duyt,  once  current. 
DOG,  W.  Indies,  Copper,  value,  3d.     The  half  Dog,  value,  lid. 
DOIT,  Hindostan,  Copper,  120  to  a  Rupee. 
DOLLAR,  Spanish,  Silver,  the  Peso  Duro,  the  Piastre,  or  Piece  of  Eight, 

an  ounce,  value,  43.  3d. 
DOLLAR,  American,  Silver,  value,  4s.  Isd.,  10  Dimes,  100  Cents,  1000 

Mills. 
SPECIE  DOLLAR,  Xorwegian,  value,  4s.  6d. 
DOLLAR,  Swedish,  Copper.    In  1679,  square,  the  legend  and  date  in  a 

circle,  a  crowTi  in  the  comers.     The  Double  Dollar  is  9  inches  square. 
DOOGANEY,  Bombay,  Copper,  a  Pice. 
DOPPIA,  Papal,  Gold,  value,  13s. 
DOPPIETTA,  Sardinian,  Gold. 

DOPPIO,  MOEDA,  Portuguese,  Gold,  value,  £2  14s.     The  Double  Pistolo. 
DO  RE  A,  Bomba}',  Copper,  value,  a  farthing. 
DORM  PENNIES,  Roman  coins,  found  in  Dorsetshire,  so  called. 
DOS  RE^VLES,  Mexican,  Silver,  value  Is.     2  Reals. 
DOUBLA,  Barbary,  value,  4s.  6d.     80  aspers. 
DOUBLE,  French,  Copper,  value,  2  Deniers,  the  Double  Denier. 
DOUBLE,  Guernsey,  Copper,  value,  half  farthing, 
DOUBLE  CROWN,  Enghsh,  Gold,  1604,  value,  lOs. 
DOUBLE  DUCAT,  various,  Gold,  value,  IBs.  8d. 
DOUZAIN,  French,  Copper,  value,  12  Deniers,  the  Sous. 
DRACHM,  Greek,  Silver,  value,  8d.,  literally  a  handful,  6  oboles. 
DRACHM,  Jewish,  Silver,  the  half  Shekel,  so  called  by  the  Greeks. 
DRACHMA,  Modern  Greek,  value,  100  Lepta. 
DRETER,  Silesian,  Copper,  the  half  Kreutzer  of  Breslau. 
DREYLING,  Danish,  Copper,  the  quarter  SkilHng. 
DRITTEL,  Mecklenburgh,  Silver,  value,  Is.,  one  thu-d  of  Rix  Dollar. 
DUBBEL,  Batavia,  money  of  account. 
DUBBELTJE,  Dutch,  Copper,  value,  2  Stivers. 
DUBS,  Hindu,  Copper.     See  Dudee,  or  Dodee. 
DUCAT,  various,  the  coin  of  a  Dukedom,  first  corned  at  Yenice,  Gold, 

value,  93.  4d.,  Silver,  33.  5d. 
DUCATELLO,  Venetian,  Silver. 


174  NUMISMATIC    DICTIONARY. 

DUCATO  DI  BANCO,  Neapolitan,  Silver,  value,  5  Tarins,  3s.  6d. 

DUG  ATONE,  Flemish,  Silver,  the  crown ;  value,  5s.  3d.,  also,  in  Parma, 

the  Scudo,  value,  4s.  3d. 
DUETTO,  Italian,  Billon,  2  quattrini. 

DUMAREE,  Hindu,  Copper,  12  to  a  Pice,  on  the  Malabar  coast 
DUPONDIUS,  Roman,  Brass,  the  double  As. 
DUTGEN,  Dantzic,  SUver,  value,  3  Groschen. 
DURO,  Spanish,  Silver,  the  hard  Dollar,  the  Cob. 
DUYT,  Dutch,  Copper,  the  eighth  of  a  stiver.     Doit. 

E 

EAGLE,  English,  Silver,  Base  coin,  temp.  K.  Edward  I. 

EAGLE,  American,  Gold,  value,  10  Dollars,  £2  Is. 

ECU,  Anglo-Gallic,  Gold,  temp.  K.  Edward  IIL     The  chaise. 

ECU,  French,  SOver,  the  Crown,  the  Ecu  Blanc,  and  Gros  Ecu. 

EBBOEER,  Danish,  Silver,  value,  14  SkiUings.     The  Justus  Judex. 

EFFECTIVE,  money  in  Spain  and  Portugal,  so  called. 

EGISTALER,  Hungarian,  SUver,  the  Dollar. 

ELECTRUM,  coins  in  metal,  partly  Silver,  and  partly  Gold. 

ESCALIN,    Netherlands,  base   sQver ;    and   name  for  the   Bit,  in  "West 

Indies. 
ESCALIN,  Liege,  Silver,  value,  lOd.  and  money  of  account  in  Basle. 
ESCUDO,  Spain,  Gold,  value,  8s. 
ESTERLING,  English,  Silver,  the  Anglo-Norman  penny,  whence  Sterling. 


FALOO,  Madras,  Copper,  value,  5  Cash. 

FAMILY  COINS,  Roman,  Silver.     Denarii  struck  under  Consiils. 

FAN  AM,  Hindu,  Silver,  value,  lid.     Fanon  and  Fano.     There  is 

FAN  AM,  Indian,  Gold,  with  aUoy,  on  the  Malabar  coast,  value,  6d. 

FARDO,  Indian,  Silver,  value,  2s.  9d.     Qu :  Pardo. 

FARTHING,  English,  Copper,  1672;  some  previously  of  pewter,  tokens, 

value,  960  to  the  £1. 
FARUKI,  Hindu,  Gold,  the  quarter  Mohur. 

FEDERAL  MONEY,  American  and  Federation  money,  German,  1838. 
FELDKLIPPE,  Netherlands,  Silver,  a  siege  piece  of  WiUiam,  Duke  of 

Julich,  1543. 
FELOUR,  Barbary,  Copper,  value,  a  farthing. 
FENIM,  Swiss,  money  of  account. 
FETTMANGEN,  Flemish,  money  of  account  at  Cleves. 
FEORTHLING,  Anglo-Saxon,  Silver,  literally  a  fraction,  the  fourth  part 

of  a  penny,  hence  derived  farthing. 
FERDING,  Russian,  Silver.     Money  of  account  at  Libau. 
FILLIPO,  Italian,  Silver.     Milan,  value,  4s.  lid. 


NUMISMATIC    DICTIONARY.  iVo 

PIORINO,  Tuscan,  Gold,  named  from  the  Fleur-do-Lis,  arms  of  Florence 

value.  Is.  lid. 
FISCA,  Canary  Isles,  Silver. 

FIVE  POUND  PIECE,  English,  Gold,  various  reigns. 
FLINDERKE,  Hanoverian,  money  of  account  at  Emden. 
FLINRICH,  Bremen,  money  of  account. 
FLITTER,  Brunswick,  Copper,  small,  literally,  a  spangle. 
FLOOSE,  Arabian,  value,  one  twentieth  of  a  penny,  money  of  account  at 

Bussorali,  and  in  Barbary. 

Fluce,  Flouche. 
FLOREN,  Flemish,  Silver,  value.  Is.  8d.,  the  Guilder. 
FLORIN,  English,  Gold,  temp.  K.  Edward  III.    The  gold  florin,  struck  by 

German  States. 
FLORIN,  English,  Silver,  1849,  a  tenth  of  the  Pound. 
FLORIN,  PoUsh,  Silver,  value,  6d.     The  Zlot. 
FOANG,  Siamese,  Silver.     Fuang,  Fouang. 
FOLLIS,  Roman,  Brass,  weight,  -Joz. 
FONDDCLI,  Turkish,  Gold,  value,  Is.  6d. 
FORLI,  Egyptian,  Copper. 

FORTY  PENCE.     Ten  groats  was  a  fee  for  a  Lawyer,  or  Priest. 
FOUR  ANGEL  PIECE,  Scots,  Gold,  temp.  K.  James  IV. 
FRANC,  French,   Silver,  value,  9id.     The  unit  also  of  Belgium,  Switzo^ 

land,  and  Sardinia. 
FRANCISCONE,  Tuscan,  Silver,  value,  4s.  4d. 
FRANKEN,  Swiss,  old  money  of  account,  value.  Is.  2id. 
FREDERICK  D'OR,  Prussian,  Gold,  value,  16s.  6d. 
FUDDAII,  Egyptian,  Silver.     The  Para. 
FUDDEA,  Bombay,  Copper.     The  double  Pice,  Id. 
FYRKE,  Danish,  Copper. 

G 

GALL,  Cochin  China,  Silver,  value,  4d, 

GASSA,  Persian.     20  to  a  MamoodL 

GARI,  Hindu.     About  4000  Rupees. 

GAZ,  Turkish,  Silver.     The  Para, 

GAZZETTA,  Venetian,  Copper,  value,  |d. 

GENOVINO,  Genoese,  Silver,  value,  4s.  4d.     The  Scudo. 

GENOVINO,  Genoese,  Gold,  value,  £3  2a  Sd.,  96  Lire,  Genovino. 

GENEVOISE,  Geneva,  Silver. 

GEORGE  D'Or,  Hanoverian,  value,  16s.  3d. 

GEORGINO,  Modena,  Silwr,  value,  2id. 

GERAH,  Jewish,  Silver,  the  smallest  money,  20th  of  a  shekel 

GHERISH,  Turkish,  Billon,  also  caUed  Piastre. 

GIGLIATO,  Tuscan,  Gold.     The  Zequin. 


176  NUMISMATIC    DICTIONART. 

GIULIO,  Papal,  Silver,  value,  6d.,  aa  the  Paulo,  and  Leono. 

GIUSTINA,  Venetian. 

GIUSTINIANO,  Venetian,  Silver. 

GOESGEN,  Hanoverian,  money  of  account. 

GOLCHUTS,  Chinese,  Gold,  in  canoe-shaped  ingots.     The  Dutch  nanio. 

GOLD  DUST,  Africa,  current  ui  Tibbar,  in  the  central  part. 

GOLD  LUMPS,  Ashantee,  current. 

GOLD  PENNY,  English,  temp.  K.  Henry  IIL 

GOURDS,  Spanish  and  Mexican  Dollars,  are  so  called  m  the  West  Indies 

GOZ,  Arabian. 

GRAIN,  Troy  weight,  the  smallest,  24  to  a  pennyweight ;  the  fourth  of  a 

SUiqua,  or  Carat. 
GR  ANO,  Maltese,  Copper.     Also  Neapolitan.    Value,  one  third  of  a  penny. 
GRISCIO,  Egyptian,  Silver,  value.  Is.  6d.,  30  medinl 
GRIWNA,  Russian,  Silver,  value,  10  copecs,  3  id.     Grieve,  Grieven. 
GROAT,  Enghsh,  Silver,  from  temp.  K  Edward  III.     Grossum,  Greater. 
Croat,  Gros. 

Broadfaced   groats.  Rex   groats,  Dominus   groats,  and  Cross  Key 
groats,  as  well  as  White  groats,  so  base  that  a  shilhng  is  worth  nme 
of  them. 
GROOT,  Dutch,  Copper,  value,  id. 
GROS,  Flemish,  SUver. 

GROS,  Anglo-Gallic,  Billon.     Also  Gros  Blanc. 
GROS  ECU,  Geneva,  Silver,  value,  4s.  8d. 
GROSCHEN,  Prussian,  Billon,  value,  30  to  a  Thaler,  l|d.    Also  Russian 

and  Polish. 
GROSSETTO,  Venetian,  money  of  account. 
GROSSO,  Luccese,  Billon,  value,  3d.     Mezzo-Grosso,  l|d. 
GROTE,   Bremen,   value,  id.,  96   Grotes  to  a   Specie  Rix  Dollar,  also 

Flemish,  12  to  a  Shilling. 
GROUCH,  T'urkish,  Silver,  the  Piastre.     Guerche,  Goorooch. 
GROUPE,  Turkish,  computation.     A  bag  of  money. 
CRUESO,  Spanish,  money  of  account  at  Navarre. 
GUBBER,  Bengal,  Gold,  the  Dutch  Ducat,  so  called.     The  Sequin. 
GUIENNOIS,  Anglo-GaUic,  Gold,  temp.  K.  Edwaid  IIL 
GUINEA,  English,  Gold,  1662,  value  20s.,  afterward  21s.     First  struck  in 

gold  from  the  Guinea  coast. 
GUILDER,  Flemish,  Silver,  value.  Is.  8d.     The  Gulden. 
GUILLOT,  Brabant,  Copper,  value,  one  sixth  of  a  Sou. 
GULDEN,  Germany,  Silver,  value.  Is.  8d.     60  Kreutzers,  Austrian,  Silver 

Gulden,  2s.,  Florin. 
GUNDA,  Bengal,  value,  4  cowries. 

GUN  MONET,  Irish,  Brass,  temp.  K.  James  II.     Made  from  cannon. 
GUT  GROSCHE,  Prussian,  Hanoverian,  24  to  a  Thaler. 


NUMISMATIC    DICTIONARY.  l"/? 


n 


HALF-PENNY,  EngUsh,  Silver,  from  temp.  K  Edward  I.    Also  Copper, 

from  temp.  King  Ciiarles  II. 
HARD  HEAD,  Scots,  Bmon,  value,  U.  the  Hardie. 
HARDI,  French,  Copper,  1270,  the  Liard  of  Philip  le  HardL 
HARDIE,  English,  Billon,  temp.  K.  Edward  HI. 
HARDIT,  Anglo-Gallic,  Gold,  temp.  K.  Richard  II.     Double  and  Hulf 

Hardits. 
HARF,  African.     Qu.  Haraff.     The  Dahal. 
HARPER,  Irish,  Silver,  value,  9d.     A  familiar  term. 
HASER  DENARIE,  Persian,  Silver.     Huza  Deenar. 
HASSIIAHSHAH,  African,  Iron,  anchor-shaped.     Hashia. 
HELFLING,  Anglo-Saxon,  Silver.     The  Halfpenny. 
HELLER,   German,   Copper.     4:  Hellers — 1  Kjeutzer,    60  Kreutzers — 1 

Gulden. 
HEMI-DRACHM,  Greek,  Gold,  value,  6  silver  Drachmae,  3s.  9d. 
HEMI-OBOLUS,  Greek,  Silver,  the  half  Obolus,  one  twelfth  of  a  Drachm. 

Hemi  Drachm,  or  Triobolum. 
HOG,  Irish,  Silver,  the  English  Shilling,  so  called. 
HOGS  PENCE,  Roman  coins,  found  in  Leicestershire,  so  called  as  turiied 

up  by  swine. 
HOON,  Madras,  Silver.     The  Pagoda. 
HORSE,  Danish,  Silver,  value,  Is.  2d. 
HUITIEME,  Genoese,  Gold,  value,  83.  4d. 

HUNA,  Hindu,  money  of  account  on  the  Malabar  coast.     Qu.  Anna. 
HUZAR  DEENAR,  Persian,  Gold.     Haser  Denarie. 


IMPERIAL,  Russian,  Gold,  10  Rubles,  value,  £1  12s.  Id.,  also  FlemisL, 

Gold,  value,  lis.  3d. 
INDEPENDENT  DOLLAR,  Chili,  1817,  Silver. 
INDERMILLE,  Hindu,  Silver,  value,  lOd.     NepauL 
INFORTIATI,  Roman.     Senatorian  coins  of  the  12th  and  13th  centuries. 
INGOT,  Japan  and  Burman  Empire,  current,  unwrought,  both  of  Gold  and 

silver. 
INGOT,  a  few  were  issued  by  the  Bank  of  England  on  resuming  cash 

payments,  in  1816. 
IRON,  Angola,  now  current,  in  bars.     Also  Lacedemonian  money. 
ITAGANNES,  Japan,  Silver,  in  lumps. 

ITZIB,  Japan,  Gold,  value,  Ss.  9d.     Bean  shaped.     Itjib,  Itchebo. 
IZELOTTB,  German,  Silver,  value,  23.  9d. 

8* 


17«  NUMISMATIC   DICTIONARY. 


JACOBUS,  English,  Gold,  value,  25s.  temp.  K  James  L 

JAGHIRE,  Hindu. 

JAKU,  Jewish,  Gold. 

JANE,  English,  Billon.     Coins  brought  from  Genoa. 

JETON,  Flemish,  Brass,  counter,  from  Jeter,  to  cast. 

JETTAL,  Hindu,  Copper,  on  Malabar  coast.     Settle.     JetuL 

JOANESE,  Portuguese,  Gold,  value,  £3  lis.  2d.    Commonly  termed  the  Joo. 

JULIO,  the  Papal,  and  Justiniano,  the  Venetian,  Silver  coins.     See  G. 

JUSTINIANO,  Venetian,  Silver,  value,  4:S.  lid. 

JUX,  Turkish,  100,000  Aspers.     Juck. 

K 
KABEAN,  Tavoy  Hindostan,  Copper,  value,  a  farthing.     40  Kabeans — 1 

Rupee. 
KAISER  GROSCHE,  Bohemian,  Silver,  value,  U± 
KALTIS,  Lydian,  Gold. 
KxlPANG,  Sumatra,  Copper,  small. 

KAZNEH,  Egyptian,  a  Treasury  of  1000  Purses,  value  £5000. 
ElEES,  Egyptian,  a  Purse  of  500  Piastres,  £5. 
KEFER,  Turkish. 
KEEPING,  Sumatra. 

KESITAH,  Canaanite,  Silver,  bearing  a  lamb. 
KHEYREETEH,  Egyptian,  Gold,  value.  Is.  9d. 
KIBEAR,  Abyssinian. 

KITZE,  Turkish  Gold.     A  Bag,  value,  30,000  Piastres. 
KLIPPINGE,  Danish,  Silver. 

KOBANG,  Japanese,  Gold,  value,  2Ts.  4d.:  it  varies. 
KODAMA,  Japanese,  Silver,  a  globular  lump  bearing  characters. 
KOLA,  nut,  Africa.     Current  on  the  "Western  Coast. 
KOMPOW,  Chmese,  Linen,  current  in  the  Philippine  Isles. 
KOPEK,  Russian,  Copper,  also  Copeck  and  Kopaika,  value,  three  eigntM 

of  a  penny. 
KOPY,  Bohemian,  money  of  account. 
KOPFSTUCK,  Austrian,  Silver.     20  Kreutzers. 
KOROOMS,  Persian,  Silver.     Keran.     Kran. 
KORSHUIDE,  Danish,  Silver. 

KRAN,  Arabian,  also  Karaun,  500  equal  to  10,000  Piastres. 
KREUTZER,  Austrian,  Copper,  value,  one  third  of  a  penny,  from  Kreutz, 

Cross.     See  Heller. 
KRONEN  THALER,  German,  Silver.     The  Brabant  Crown  or  Dollar, 

value,  4s.  5d. 
KRUMSTBRK,  Hanoverian.     At  Emden. 


NUMISMATIC    DICTIONARY.  17P 


LAC,  Bengal  computaliou,  100,000  Rupees,  etc.     Lakh. 

IiAND    MITNTZ,  German,    IBillon,   money  circulating  only  in  the  State 

where  coined. 
LARGE  BRASS,  Roman.     The  Sestertius,  value,  about  2d. 
LARIN,  Arabian,  Silver,  value,  Is.     Laree.     Persian. 
LAUB  THALER,  Prussian,  Silver.     The  Dollar  with  a  wreath. 
LAUREAT,  English,  Gold.     Temp.  K  Jas.  I.     Laurel,  value,  20a. 
LAXSAN,  Batavian,  money  of  account. 
LEADEN  COINS,  Roman.     Nummi  plumbei,  and  current  in  the  Birman 

Empire,  also  Tokens  English. 
LEAM,  Chinese,  Silver,  in  Ingots,  each  value,  Gs.  8d. 
LEATHER  COINS,  Roman.     Ases  Scorteos,  and  Enghsh  Tokens. 
LEONINE,  English,  base  foreign  coin,  temp.  King  Edward  I.,  value,  -Jd. 
LEOPARD,  Anglo-Galhc,  Gold,  temp.  K.  Edward  IIL 
LEOPOLD,  Belgium,  Gold,  value,  19s.  4^d.,  when  issued  25  Francs,  now 

24|-  Francs. 
LEOPOLDINO,  Tuscan,  Silver,  value,  4s.  5d. 

LEPTON,  Greek,  Copper,  ancient;  modern  Lepta,  100  to  a  Drachma. 
LIARD,  French,  Copper,  value,  3  deniers. 
LIBELLA,  Roman,  Brass.     The  As  of  diminished  weight. 
LIBRA  JAQUESA,  Spanish,  value,  Ss.  Id.,  money  of  account  in  Arragoi}, 

and  Balearic  Isles. 
LION,  Scots,  Gold.     Le  Lion,  an  early  French  coin,  and  Anglo-Gallic  in 

Billon.     Lion  Dollar  is  Dutch. 
LIRA,  Italian,  Silver.     Lira  Nouva,  value,  9sd.,  Lira  Austriaca,  value,  8d. 
LIRAZZA,  Venetian,  Silver,  base,  value.  Is.  3d.,  30  Soldi. 
LISBONINE,  Poi-tuguese,  Gold,  value,  253. 
LIVONINA,  Russian,  old  coin. 
LIVORNINO,   Tuscan,   Silver,  value,   4s.  4d.,  also  Lantern,  or   Tower 

Dollar. 
LIVRE,  Old  French  computation,  value,  lOd.,  20  sous.     Livre  Toumois,  a 

coin  of  Tours. 
LOUIS  D'OR,  French,  Gold,  value,  18s.  8d. 
LOUIS  D'ARGENT,  French,  Silver,  value,  60  sous. 
LLTJS,  the  money  of  Lubeck. 
LUCULLEA,  Roman.     Money  struck  in  Greece  by  Lucullus,  by  order  of 

Sylla 
LUNG  A,  the  currency  of  Leghorn,  as  distinguished  from  that  of  Florence. 
LUSBURGER,  Luxemburg  Silver  penny,  temp.  K  Edward  I. ;  forbidden 

in  England,  temp.  Edward  IIL 
LTANG,  Chinese,  money  of  account. 


180  NUMISMATIC    DICTIONARY. 


M 


MAAMBE,  Egyptian,  Silver,  value,  2  Piastres,  8d. 

MACE,  Sumatra,  Batavia,  and  China,  value,  8d. 

MACUQUINA,  Brazilian,  Silver,  the  cut  money,  quina  of  arms  5  shields 

Portugal. 
MACUTA,  Portuguese,  Africa,  Silver,  value,  2fd.,  2000  zimbis  or  cowriea. 
MADONINA,  Genoese,  Silver,  value.  Is.  6fd.     The  double  Lira. 
M^RRA,  Anglo-Saxon,  Silver.     The  Bener  penny. 
MAHBUB,  Tripoli,  Gold,  value,  Is.  id.,  also  Mahboob. 
MAHHBOUL,  African,  value,  4s.  2d. 

MAILE,  English,  Silver,  the  Half  Sterling,  temp.  Henry  IV. 
MAILLE,  French,  Billon,  base  coin  of  smallest  value. 
MAJORINA  PECUNIA,  Roman,  Brass.     Lower  Empire. 
MALLA,   Spanish,  Copper,  2    Mallas — 1  Denier.     The   smallest    *oin   at 

Barcelona. 
MALTIER,  German,  Billon,  vahie,  half  a  Marien  Groschen. 
MAMOUDA,  Arabian,  Silver,  value,  5id.,  10  Floose — 1  Danim,  10  Danims 

— 1  Mamouda.     Also  MamoodL 
MANCANZA,  Neapolitan,  Gold,  value  15s.,  4  Ducati. 
MAMCOUSCH,  Arabian,  Gold. 
MANCUS,    Anglo-Saxon,    Gold,    value,    30    pence.     From   the  Arabian 

Mancush. 
MANEH,  Jewish,  equal  to  50  or  60  Shekels. 
MANGAR,  Greek,  4  to  an  asper. 
MANILLA,  African,  Copper,  current  on  western  coast,  also  of  Iroi?  and 

of  Tin. 
MARABOTIN,  Spsni^h,  Silver.     Arabic  Dirhem. 
MARADOE,  Chinese,  Silver,  value,  600  Cash. 
MARAVEDI,    Spanish,    Copper,    34    Maravedis— 1    Real,    20    Reals— 1 

Dollar. 
MARC,  Danish,  SQver,  Marc  of  Currency,  value,  4id.,  specie  Marc,  valuo 

Is,  6d.,  Marc  of  Hambro  and  Lubeck,  Is.  6d.     Also  Marc. 
MARC,  Nwwegian,  Silver,  specie  Marc,  value,  lOsd.,  24  Skilling'S. 
MARCHETTO,  Venetian,  Billon,  value,  td.     Marcucci,  the  St.  Mark. 
MARENGO,  Lombardy,  Gold,  value,  14s.  7d.     Eridania  1801. 
MARIEN  GROSCHEN,  German,  Billon,  value,  fd.,  36  to  a  Thaler,  Marien 

Gulden,  at  Brunswick. 
MARK,  English  Computation,  ISs.  4d.     Mearc,  Anglo-Saxon,  also  Danish 

and  Swedish. 
MARK,  Scots,  Silver,  1581. 

MARK  OF  COLOGNE,  German  weight,  8  oz.  Troy. 
MARQUE,  Mauritius,  Copper. 


NUMISMATIC    DICTIONARY.  181 

MAS.     Qn.    Mace,    Chinese   and   Indian   Silver,    value,   100   Cash.     Tho 

Masse,  14  Rupees. 
MASSE,  French,  Gold,  1314.     Tho  Chaise.     From  tho  Maco  or  Scepter. 
MATH,  Hindoo.     Money  of  account  at  Rangoon. 
MATTAPAN,  Venetian,  Silver,    value,  3d.     Coined  at  Cape   Mattapan, 

1203. 
MATTIER,  Hanoverian,  Silver.     Matthier,  Copper. 
MAUNDY  MONEY,  English,  Silver.     Tho  Silver  Id.,  2d.,  3d.,  and  4d., 

coined  for  Roj^al  Ch.irity  on  Maundy  Thursday. 
MAX  D'OR,  Bavarian,  Gold,  value,  13s.  Id,  MAXIMILIAN,  It  Ducata. 
MEDAL,  a  term  for  a  coin,  not  struck  for  currency. 
MEDIA  ONZO,  Mexican,  Gold,  value,  £1  123.     Also  Media  quarta  de 

Onza. 
MEDIAN,  Barbary,  Gold. 

MEDINO,  Egyptian,  Silver,  the  Para^     Tlie  Turkish  Medin  or  Meidein. 
MEDIO  PESA,  Mexican,  Silver,  value,  2s.  IJd.     The  half  dollar. 
MEDJEDEER,  Turkish,  Silver,  value,  3s.  5d,  20  Piastres. 
MEISSNER  GULDEN,  Saxony.     Money  of  account  at  Leipsic. 
MENIAN,  Barbary,  Silver,  value,  2s.  7d.,  50  Aspers. 
MERAU,  French,  Lead.     A  Token  at  Religious  festivals. 
MERIGAL,  Barbary,  Gold,  value,  18s. 
MERK,  Scots,  SUver,  value,  Is.  Id. 
MESS  VALUTA,  Tyrol,  money  of  account  at  Bolsano. 
METIOAL,  Barbary,  Gold,  value  various. 
METALLINE,  Roman,  Copper  vpashed  with  Silver,  so  called. 
MEZZO  SCUDO,  Lucca,  SUver,  half  Scudo. 
MIDDLE  BRASS,  Roman.     Size  of  Semi.s. 
MIL,  proposed  name  for  the  thousandth  part  of  the  Pound. 
MILL,  United  States,  money  of  account.     1000  to  a  Dollar. 
MILREA,  Portuguese,  Gold,  value,  4s.  5d. 
MILREI,  Portuguese,  Silver,  value,  43.  5d.     1000  Reis. 
MILREI,  Brazils,  Silver,  value,  formerly  4s.  5d.,  now  2s.  Id. 
MIMOEDA,  Portuguese,  Gold,  value,  13s.  6d.     Tho  half-moidore. 
MINCE,  Greek,  Gold,  value,  £3  4s.  7d.,  100  draclmia.    Mina,  the  Turkish 

Asper. 
MINUTA,  Anglo-Saxon,  Copper.     The  Styca. 
MIOBOLO,  Ionian  Islands,  Copper. 
MIRLITOF,  French,  Gold 
MISCAL,  Arabian,  Gold. 

MISSILIA,  Roman.     Coins  scattered  at  the  Games. 
MITE,  English,  Copper,  value,  ono  third  of  a  farthing. 
MITKUL,  Barbaiy,  Gold,  value,  9s.,  24  Fluces— 1  Blankeel,  4  Blankeol&— 

1  Ounce,  10  Ounces — 1  Mitkul.     Bondiky,  Miscal,  or  Ducat. 
MITRE,  English,  base  silver,  temp.  K.  Edward  I. 


182  NUMISMATIC    DICTIONARY. 

MOBOGS,  Hindu,  seeds  used  for  weighing  gold, 

MOCO,  "W.  Indies,  Silver,  value,  £la  l|d.     A  piece  cut  from  a  Dollar. 

MOHUR,  Hindu,  Gold,  value,  £1  9s.  Id.,  the  Mohur  Sicca,  328.     Mohr, 

Mohar,  and  Moore. 
MOILORE,  Portuguese,  Gold,  value,  27s.     The  Moeda  D'oro. 
MONACO,  Italian,  Silver,  value,  4s.  4d.     The  Monk. 
MONZONNAH,  Barbary,  Silver,  value.  Id. 
MOSTOSKA,  Russian,  Copper,  4  to  a  Kopek. 
MOUTON,  Anglo-Gallic,  Gold.     Bearing  Agnus  DeL 
MUSKET  BALLS,  American,  value,  a  farthing,  current  in  Masaachuactta, 

1656. 
MURAGLIOLI,  Modena,  Copper,  value,  Id. 
MYNET,  Anglo-Saxon,  whence  mint. 
MURAJOLA,  Bologna. 
MUNTZE,  German.     The  smaU  coins. 

N 

NANDIOGINS,  Japanese,  Silver.     A  lump. 

NAPOLEON,  French,  Gold,  1803,  value,  153.  lOd.,  20  Franca. 

NASARA,  Tunis,  Silver,  value,  2  id. 

NAULUM,   Greek,  money  put  into   mouths  of  deceased  persons.     The 

freight. 
NEWEMEEN,  Ashantee,  Gold,  value,  £4  5s.  4d.  an  ounce. 
NOBLE,  English,  Gold,   1344,  value,    63.    8d. ;   there  are  George,   Rose 

Nobles,  etc. 
NUMMUS,  Roman,  the  Sestertius,  also  the  Generic  name  for  money 
NOIR,  French  "W.  Indies,  Billon,  lid.  the  black  dog,  so  called. 

0 
OBAN,  Japan,  Gold.     Ouban. 
OBOLUS,  Greek,  Brass,  also  Anglo-Saxon,  and  English,  temp.  K.  Henry 

III.,  base. 
OBOLUS,  Rhenish,  Gold.     Also  Silver,  value,  Is.  2d. 
OBOLO,  Ionian  Islands,  Copper. 
OBSIDIONAL,  money  struck  during  a  siege. 
OCHAVA,  Mexican,  Copper,  value,  fd.,  8  Ochavas — 1  Rial,   8  RiaJs — 1 

Dollar. 
OCHAVO,  Spanish,  Copper,  value,  |d.     The  Chavo  and  Chovy. 
OCHELLO,  Venetian,  Gold,  value,  £1  17s.  8d.,  4  Zecchme. 
OCHOSEN,  Spanish.    The  smallest  old  coin. 
OCTAGON,  California.     See  Slug. 
OERTOGS,  Swedish,  SQver. 

ONCETTA,  Neapolitan,  Gold,  value,  10s.  3d.,  Ouza. 
ONCIA,  Italian,  Gold,  value,  10s.  3d.  in  Sicily. 


NUMISMATIC    DICTIONARY.  183 

ONZA  DE  ORO,  Mexican,  Gold,  value,  £3  4s.     Tlio  Doblon. 

ONZARO,  Papal,  Gold,  value,  9s.  4d.,  the  Ducat.     Onguro. 

OR,  Persian,  Silver,  value,  6s.  8d. 

ORA,  Anglo-Saxon,  computation,  an  ounce,  20  pennies.     Also  Danish. 

OR,  or  Ore,  Swedish,  Copper,  and  Silver,   value.    Id.     Koppar  Ore,  the 

Rund.styck.     Silver,  the  Styfer. 
ORT,  Danish,  the  fourth  ;  as  Ort  Groschen,  fourth  of  a  Groat. 
ORTJE,  Flemish,  Copper. 

OSELLA,  Venetian,  Gold.     Oselle,  Venetian,  Silver,  value,  3s.  2d.     OselL 
OSTIC,  Greek,  value,  6d. 

OUSTAVA,  Portuguese.     A  division  of  the  Mark. 
OWL,  Greek,  Silver.     The  Tetradrachm, 


PADENS,  Hindoo,  nuts  from  Persia,  current  at  Surat.     The  Baddams. 
PAGODA,  Hindoo,  Gold,  and  also  Silver.     Star  Pagoda,  value,  7s.  4d. 

Arcot  Pagoda,  value,  4s.  lid. 
PAISAH,  Hindoo,  Copper.     Nepaul. 
PAOLO,  Papal,  Silver,  value,  5d.,  10  Pauli— 1  Scudo. 
PAPARINA,  Roman,  coins  of  12th  and  13th  centuries,  also  called  Pro- 

visini. 
PAPETTO,  Papal,  SOver,  value,  10  id. 
PAPIROLO,  Sardinian,  BiUon. 

PARA,  Turkish,  Bilion,  40  Paras  to  a  Piastre.     Parat. 
PARDO,  Barbary,  Silver,  value,  Is.  3d.     Pardao.     Also  Indian. 
PARGO,  Portuguese  India,  Silver,  value,  2s.  5d.,  4  Tangas. 
PARISIS  D'OR,  French,  1350.     And  Parisis  dArgent,  1350. 
PARPAJOLO,  Lorabardy,  Billon,  value,  Id.,  8  to  a  Lira. 
PASTEBOARD,  Dutch.     Siege  money  at  Leydcn,  1574. 
PATACA,  Portuguese  and  Brazilian,  Silver,  value.   Is.  5d.,  Patacao  or 

Sello. 
PATACK,  Batavian. 

PATACON,  Spanish,  Silver,  value,  4s.  3d. 
PATAGON,  Dutch,  Silver,  value,  4s.  Id.,  50  Stuyver  Piece,  or  Leg  Dollar. 

Swiss,  value,  3s.  lOd. 
PATARD,  Flemish,  Copper,  value,  Id.     Patar,  the  Stiver. 
PATTY,  Hindoo,  inferior  coin  of  Trangania. 
PAUNCHEA,  Bombay,  money  of  account,  value,  5  Rupees. 
PA  VILLON,  Anglo-Gallic,  Gold,  temp.  K.  Edward  III. 
PECCO,  Java.     Money  of  account. 
PECHA,  Tartary,  Copper.     Pessa,  Pice. 
PECUNIA,  Roman  money,  from  Peeus,  cattle. 
PENGE,  Danish,  Pence,  money. 
PENGUIN,  Ashantee,  Gold,  value,  £11  IGs.  4d. 


184  NUMISMATIC    DICTIONARY. 

PENING,   Dutch,   Copper,   the   half-fartbing,   coin   in    general   in    many 

countries. 
PENNY,  Anglo-Saxon,  Silver ;  English,  Gold,  temp.  K.  Henry  III.,  also 

Copper,  from  temp.  K.  George  III.,  240  to  a  Pound. 
PENNY  OP  SAINT  PAUL,  Westphalia,  SUver,  1260.     Munster. 
PENNYYARD,  Penny,  Silver,  English  coins  in  heraldry  so  called.    Spence, 

arms. 
PENTADRACHM,  Greek,  Silver,  value,  3s.  6d.     5  Drachma;. 
PERPERO,  Ragusa,  Silver.     Perpera,  Greek,  Gold,  value,  10s. 
PESETA,  Spanish,  Silver,  value,  Is.  0|d.,  6  Reals;  the  Mexican  quarter 

dollar. 
PESO  DURO,  Spanish,  Silver,  value,  4s.  3d.     The  Hard  Dollar. 
PESSA,  Hindoo,  Copper,  value,  id.     Pecha,  Pice. 
PETERMENGEN,  Germany  Triers,  Billon,  value,  fd. 
PETIT  FLORIN,  Tuscan,  Gold,  1340. 
PETIT  RYAL,  French,  Gold,  1314. 
PEZZA,  Tuscan,  Silver,  value,  3s.  8d.     Pezza,  Leghorn,  Gold,  value,  4s., 

Pezzi  Solidi,  Piasters. 
PFENNIG  German,  Copper,  12  Pfennings — 1  Groschen,  30  Grosehen--! 

Thaler. 
P'HAI'NUNG,  Siamese,  weight  for  gold. 

PHILIP,  Flemish,  Gold.     The  Ryder.     Phillipo,  Lombardy,  SOver. 
PHCENIX,  Mod.  Greek,  SUver,  value,  8d. 
PIASTER,  Spanish,  Silver,  the  Dollar,  value,  4s.  3d. 
PIASTRA,  a  la  Rose,  Tuscan,  Silver.     The  Neapolitan  DoUar. 
PIASTRE,  Turki-sh,  SDver,  value,  3d. 
PIATAK,  Russian,  Copper,  value,  5  Kopeks. 
PIC,  Chinese,  value,  100  Catties. 

PICE,  Hindoo,  Copper,  12  Pice — 1  Anna,  16  Annas — 1  Rupee. 
PICCHALEON,  Sardinian,  Copper.     The  Centisimo. 
PICCOLA,  Maltese,  Copper,  6  to  a  Grano,  the  smallest  coin. 
PIECE  OF  EIGHT,  Spanish,  SUver,  value,  4s.  3d.,  the  DoUar,  or  Piaatei 

formerly  8  Reals,  now  20  Re;Us. 
PIED-FORT,  French,  a  standard  coin,  or  Pattern. 
PIGNATELLO,  Papal,  BUlon,  temp.  P.  Innocent  XIL 
PILLAR  DOLLAR,  Spanish,  SUver.    The  DoUar  with  the  PUlars,  value, 

4s.  3d. 
PINA,  Peruvian,  Silver  BuUion. 

PISTAREEN,  Spanish,  Silver,  value,  lOd.,  the  fifth  of  the  DoUar,  4  Reals 
PISTOLE,  Spanish,  Gold,  value,  16s.,  formerly  32  Reals,  now  80. 
PISTOLE,  German,  various  States,  Gold,  value^  16a.  3d 
PISTOLE,  Scots,  Gold,  1701. 
PITIES,  Batavian,  leaden  coins. 
PLACK,  Scots,  BUlon,  one  tliird  of  a  penny 


NUMISMATIC    DICTIONARY.  185 

PLATINUM,  Russian,  3  Rouble  piece,  current  value,  8a.   lOd,  intrinsic 

value,  Gs. 
PLAPPART,  Swiss,  Copper,  a  Bernese  coin,  1158. 
PLAPPERT,  Gorman,  Billon,  value,  2d.,  4  Albus. 
PLAQUKTTE,  Flemish,  Billon. 

PLATA,  Mexican,  Silver  money.     Plata  Macuquina,  Brazilian  strips. 
PLATES,  Swedish,  Copper.     The  large  coins. 
PLOTT,  Swedish,  Silver,  value.  Is.  6d.     Plat. 
PLUMBEI  NUMMI,  Roman,  leaden  coins.     Temp.  Saturnalia. 
POLLARD,  English.     A  Poll  head,  clipped  coin. 
POLONAISE,  Polish,  Gold. 
POLTIN,  Russian,  SDver,  value,  Is.   6d.,  the  half  Ruble.     Polpoltin,  tho 

quarter  Rouble. 
POLTURAT,  Hungarian,  Copper. 
POLUSKA,  Russian,  Copper.     The  quarter  Kopek. 
PONDO,  Roman,  Brass.     The  As. 
PONE,  Tartary,  Copper,  value,  |d. 
PONTE,  Sicilian.     Money  of  account. 
POOT,  Junk,  Ceylon,  Tin  money. 
PORCELAIN,  a  shell,  current  in  W.  Indies. 
PORTCULLIS,  English,  Silver,  at  Bombay,  Crown,  Half-crown,  Shilling, 

and  Sixpence,  temp.  Q.  Elizabeth. 
PORTUGALESB,  Lubec,  Gold. 

POTIN,  Egyptian,  coins  of  a  mixture  of  lead,  copper,  and  tin. 
POUL,  Tartary,  Copper.     Poul  e  Siaho,  Persian,  Copper. 
POUND,  Anglo-Saxon  and  English,  computation,  value,  203. 
PROVISINI,  Roman,  Senatorian  coins  of  the  12th  and  13th  centiiries. 
PUBLICO,  NeapoUtan,  Copper. 

PUL,  Persian,  Copper.     The  general  name  for  coins  of  that  metal. 
PULZLATY,  Hungarian,  Silver,  the  half  Florin. 
PUNN,  Bengal,  value,  20  cowries. 
PURSE,  Turkish,  500  Piastres. 
PYSA,  Asiatic,  Copper,  value,  50th  of  Mamoud.     Qu.  Pice. 

Q 

QUADRANS,  Brass,  Roman,  4th  of  the  As.     Small  brass. 
QUADRIGATI,  Roman,  Silver,  denarii  with  four-horse  car. 
QUADRUPLE,  Spanish,  Gold,  4  Pistoles,  value,  £3  4s. 
QUADRUPLE,  Sardinian,  Gold,  80  Lire,  value,  £3  Ss.  4d. 
QUADRUSSIS,  Roman,  Brass,  value,  4  Asses.     The  As  Grave. 
QUAN,  Cochin  China,  Silver,  value,  4s.  6d. 
QUART  CROWN,  Bavarian,  Silver,  value,  la.  Id. 

QUARTA  ONZA,  Mexican,  Gold,  value,  i6s.     Quarto  de  Peso,  Peruvian, 
Copper. 


186  NUMISMATIC    DICTIONART. 

QUARENTINO,  Modena,  Silver,  value,  Is.  8d 

QUARTER  GUINEA,  English,  Gold,  value,  5s.  3d.    K.  George  I.  and  III. 

QUARTILLO,  Mexican,  Silver.     Quarter  Real. 

QUARTINHO,  Portuguese,  Gold. 

QUARTO,  Gibraltar,  Copper,  value,  fartliing,  16  Quartos — 1  Rial,  12  Rials 

— 1  Dollar,  from  the  Spanish  Cuarta. 
QUATTRINI,  Venetian,  Silver,  very  smaU. 
QUATTRINO,  Italian,  Copper,  value,  farthing.     Quattrinello. 
QUILATE,  Spanish.     The  Carat. 
QUINARIUS,  Roman,  Silver.     The  half  denarius,   marked  V.     Also  of 

Gold. 
QUINCUNX,  Roman,  Brass.     5  Asses.     The  Quincussis. 
QUINTO  DI  SCUDO,  Lucca,  SOver,  value,  lO^d. 
QUINTUPLE,  Neapolitan,  Gold,  5  Ducati,  value,  17s.  Id.,  5  Scudi,  value, 

19s.  2d. 

R 

RADER  FLORIN,  German.     Money  of  account  at  Cologne. 

RAGUSINA,  Ragusa,  Silver. 

RAPP,  Swiss,  Copper,  10  Rappen — 1  Batz.     Angster. 

RATHSPRJilSENTGER,  German,  Silver,  value,  8d.     ALx  la  Chapello. 

RATISBONINA,  Ratisbon.     Money  of  account. 

RATITI,  Roman,  Silver.     The  denarius  bearing  a  Ratis.     Raft. 

REAL,  Spanish,  Silver,  the  Rial,  value,  2id.     20  Reals— 1  Dollar. 

REAL,  Persian,  Silver.     The  Rupee. 

REALE,  Sardinian,  Silver,  value,  45d.     The  Florentine. 

RED  WOOD,  Angola,  now  current. 

REGENSBURGER,  Ratisbon.     Money  of  account. 

REI,  Portuguese,  Copper,  value,  one  fifth  of  a  farthing.  Rez,  Reis,  com- 
putation, 1000  Reis — 1  MiUrei. 

REICHS  GULDEN,  Saxony,  Silver,  value.  Is.  8d.  Two  thirds  of  Bix 
Dollar. 

REICHS  THALER,  Prussian,  Silver,  value,  2s.  lid. 

BESELLADO,  Spanish.     Money  re-coined. 

RIAL,  Enghsh,  Gold.     The  Rose  Noble,  temp.  K.  Edward  IV. 

RIAL,  Mexico,  Silver,  value,  Qid.,  8  Rials — 1  Dollar. 

RIDDY,  Ceylon,  Silver,  bent  wire,  value,  7d.     Rheedy. 

RIDER,  Scots,  Gold.     Temp.  EL  James  IV.     Ryder. 

RIKS  DALER,  Danish,  Silver,  specie  value,  4s.  1±  The  Rigsbattk 
Dollar,  value,  2s.  3d. 

RING  MONEY,  Gold,  Silver,  Iron,  and  Tin,  Celtic.     Now  in  Africa. 

RIX  DOLLAR,  Hanse  Towns,  Silver,  specie  value,  3s.  lOid.,  and  current 
value,  2s.  lid. 

RIX  DOLLAR,  Sweden,  Silver,  specie  value,  4s.  6d.,  Rix  Dollar  Banco, 
value,  Is.  Sd. 


NUMISMATIC    DICTIONARY.  187 

ROANOKE,  Indian  shells  strung,  value,  6d.  a  cubit,  or  18  inchea 

ROOKIE,  Turkish,  SUver,  value,  Is.  8d.     Qu.  Gold. 

ROSARIE.     A  base  coin,  perhaps  Abbey  piece. 

ROSE  NOBLE,  English,  Gold,  value,  Gs.  8d.,  and  in  temp.   K.  James  L, 

Rose  Royal,  value,  30s. 
ROSINA,  Tuscan.  Gold,  vdue,  18s.  3d.     Mezza  Roaina.. 
ROUP,  Polish,  Silver,  value,  5d. 

RUBIC,  Turkish,  Gold,  value.  Is.  9d.  35  Aspcrs.  Rubicla. 
RUBLE,  Russian,  SOver,  value,  3s.,  100  Copecks.  Rouble. 
RUNSTYCK,  Swedish,  Copper,  value,  one  sixth  of  a  farthing.     Kcppar 

Ore. 
RUPEE,  Hindostan,  value.  Is.  lid.,  16  Annas.     Inscription  in  Oriental 

characters,  the  oldest  are  square. 
RUSPONE,  Tuscan,  Gold,  value,  £1  8s.  6d.,  from  Ruspo,  newly  coined. 
RYAL,  French,  Gold.     See  Rial. 
RYDER,  Flemish,  Gold,  value,  £1  4s.  9d.     Also  Silver,  value,  5s.  4d.    The 

Ducatoon.     See  Rider. 
RY  KSORT,  Danish,  Silver. 

S 
SAADEEYEIT,  Egyptian,  Gold,  value.  Is. 
SAHIB  KORAN,  Persian,  SUver,  value.  Is.  2d. 
SAIME,  Barbary.     Money  of  account  at  Algiers. 
SAINT  ANDREW,  Scots,  Gold. 
SAINT  JOHN  THE  BAPTIST,  Genoese,  SQver. 
SAINT  MARK,  Venetian,  Silver.     The  Crociato,  or  Scudo. 
SAINT  THOMAS,  Portuguese,  Gold,  value,  9s.     At  Goa,  in  India. 
SAINT  STEPHEN,  Portuguese,  Gold,  value,  30s.     The  Mikea. 
SALDING,  English.     Base  coin,  temp.  K.  Edward  I.     Scalding. 
SALUNG,  Siamese,  value,  2  Foangs. 
SALUT,  Anglo-GaUic,  Gold,  value,  13s.  4d. 
SANNAR,  Persian. 

SANTA,  Chinese  computation,  9d.     200  Cash. 
SATTALIE,  Bencoolen,  also  SatteUee,  money  of  account,  3  Sattalies — 1 

Succos,  4  Succos — 1  DoUar. 
SCARABEI,  Egyptian,  clay-baked,  beetle-shaped,  probably  current  money ; 

also  Greek,  Gold,  and  Silver. 
SCEATTA,  Anglo-Saxon,  Silver. 
SCHAAF,  Hanoverian.     Money  of  account  at  Emden. 
SCHALIN,  Dutch,  SUver,  value,  7d. 
SCHELLING,  Flemish,  BUlon. 
SCHERFFE,  Brunswick.     Money  of  account. 
SCHILLING,  Fanse  Towns,  Billon,  value,  Id, 
SCHLANTE,   Swedish,   Copper,   value,   Jd.    Slantar  or  Los  penningar 

Copper. 


188  NUMISMATIC    DICTIONART. 

SCHLECH  THALER,  German.     Money  of  account  at  Aix-k-Chapello. 

SCflOCK,  Saxony,  money  of  account. 

SCHUITE,  Japanese,  Silver,  boat-shaped,  value,  25s.  3d. 

SCHWARE,  Bremen,  Copper,  5  to  the  Grote. 

SCHWARTZ,  Hanse  Towns,  5  Schwartzen— 1  Grote. 

SCORTEOS  ASES,  Roman,  Leather  Coins. 

SCUDINO,  Modeua,  Gold. 

SCUDO,  Italian,  SQver,  value,  4s.  2d.,  10  PaolL 

SCUDO  D'ORO,  Genoese,  value,  4s. 

SCUTE,  English,  temp.  Q.  Elizabeth. 

SCYLLINGA,  Anglo-Saxon.     Computation. 

SECHSER,    German,  Copper,  value,  2d.,  literally  a   sixer,  or  Kreutzer 

Piece. 
SECHSLING,  Hamburg,  Copper. 

SECHSTELS,  Saxony,  Silver,  value,  5d.,  4  good  groechen. 
SEGROS,  Polish,  Billon,  value,  4d. 
SELAH,  Jewish,  Silver.     2  Shekels. 
SELLO,  Brazils,  SOver,  value,  2s.  9d.     See  Pataca. 
SEMBRELLA,  Roman,  Brass.     SeUbra,  Semi  Libella. 
SEMI,  Boman,  Brass.     The   Semi  As  or  Semiuncia,  and  Semi  Aureus, 

Gold. 
SENI,  Japanese,  Copper.     The  Cas.     600  to  a  TaeL 
SEPECK,  Anam  Emp.  Brass. 
SEQUIN,  Turkish,  Gold,  value,  9s.  3d.,  Chequin  or  Sultany.     Also  Italian, 

Zequin  or  Zechino. 
SERRATA,  Roman.     Coins  with  the  edges  notched, 
SESSINO,  Parma,  Copper.     Sesino. 

SESTERTIUM,  1000  Sestertii  (HS),  Roman  money  of  account. 
SESTERTIUS,  Roman,  Silver,  4th  of  Denarius,  also  Large  Brass. 
SESTHALF,  Dutch,  SOver,  value,  5d. 
SEVEN  SHILLINGS,  English,  Gold,  temp.  K.  George  IIL 
SEXTANS,  Roman,  Brass.     6th  of  the  As. 
SEXTULA,  Roman,  Brass. 
SHAHEE,  Persian,  SUver,  value,  id.,  4  Shahis — 1  Piastre,  5  Piastres — 1 

Karaun,  10  Karauns — 1  Tamaun.     Shahi. 
SHAKEE,  Turkish,  Silver,  value,  S^d. 
SHATREE,  Persian,  Silver. 
SHARI,  Kabul,  Silver,  value,  5d. 
SHEKEL,  Jewish,  Silver,  value,  3s.     Also  in  Gold. 
SHILLING,  English,  Silver,  20  to  a  Pound. 
SHOE,  Chinese,  Gold  and  Silver  Ingots,  value  various,  from  one  half  to 

100  Tales.     Batch  name,  Schuit. 
SHOSTACK,  German,  money  of  account  in  Prussia,  Poland,  etc.,  Shusiact 
SIANI,  Syria.     Money  of  account  at  Aleppo,  24  Siani — 1  Aspro. 


NUMISMATIC    DICTIONARY.  189 

SICCA,  Persian,  Gold,  at  Delhi:  means  a  Die,  a  Coin. 

SICCA  Rupee,  Bengal,  Silver,  value,  2s.  Id. ;  Sicca,  a  weight. 

SICLE,  Jewish,  Silver.     The  Shekel. 

SIGILL^,  Roman,  Brass,  also  leaden  counters  at  the  Saturnalia. 

SILBER  GROSCIIEN,  Prussian,  Base  metal,  value,  l^d.,  30  to  a  Thaler. 

SILIQUA.     The  Carob  Bean.     The  Carat  weight. 

SILVER  SOVEREIGN,  Spanish.     The  Dollar,  so  caUei 

SINGPNAI,  Siamese,  value,  2  P'hainungs. 

SLET  DOLLAR,  Danish.     Schlccht,  a  4  Mark  Piece. 

SLIPS,  English,  Base  monej'-,  temp.  K.  Edward  VI.,  value,  lid. 

SLUG,  California,  Gold,  value,  £10  5s.  2d.;  50  Dollars,  Octagon. 

SMALL  BRASS,  Roman.     The  size  of  the  Sextans. 

SNAPHANE,  Brabant,  Silver,  1489. 

SOL,  Old  French,  Copper.     The  Sou. 

SOLDO,  Italian,  Copper. 

SOLIDUS,  Roman,  Gold,  value,  123.     Solidus,  the  Anglo-Saxon  shilling. 

SOLOTA,  Greek,  value.  Is. 

SOMPAYE,  Siamese,  Silver. 

SOVEREIGN,  English,  Gold,  1485,  value,  £1  5s.;  1816,  value,  £1. 

SOVEREIGN,  Austrian,  Gold,  value,  £1  Vs.  lOd.,  3  Ducats. 

SPINTRI^,  Roman,  Brass,  obscene  tickets,  not  current. 

SPUR  ROYAL,   English,  Gold,  value,  15s.     The  Spurred  Groat,  Scots. 

Silver,  value,  16d. 
STATER,  Greek,  Gold,  value,  about  £1  3s.,  Greek  for  standard.    Early 

name,  Chrj^sus. 
STEPING,  English,  Base  coin,  temp.  K.  Edward  I. 
STERLING,  Anglo-Norman,  Silver.     Steore,  Standard. 
STIVER,  Flemish,  Copper.     Stuyver,  Dutch,  Billon,  value.  Id. 
STUBER,  German,  Copper.     The  Stiver.     Styfer,  Swedish,  Billon. 
STYKKER,  Danish. 

SUCCO,  Beneoolen,  money  of  account,  quarter  doUar. 
SUADO,  Austrian,  SUver,  value,  4s.  8d. 
SUELDO,  Catalonia  and  Majorca,  money  of  account,  12  Dineros — 1  Sueldo, 

12  Sueldos — 1  Libra,  value,  2d. 
SUSKIN,  English.     The  diminutive  of  the  French  Sou. 
SWINE  PENNIES,  Roman  coins  found  in  Lincolnshire,  so  called. 
SYCEK,  Chinese,  Silver  Ingots,  cauoo-shaped,  Chinese  standard  silver. 
SYFERT,  Hanoverian,  Copper,  current  at  Embden. 

T 
TAEL,  Chinese,  Silver,  value,  6s.  8d.,  1000  Cash.     ThaO,  Japan,  Tell. 
TAIJA,  Spanisli,  Copper,  value  Ihe  4th  of  a  Real. 

TALARO,  Tuscan,   Silver,   the   Dollar,   the  Thalaro  of  the  Levant,    10 
Piastres.    Turkey. 


lUO  NUMISMATIC    DICTIONARY. 

TALENT,  Hebrew,  computation,  GO  Shekels. 

TALENT,  Greek,  weight  60  Minas,  the  value  of  the  Attic  Mina  waa 
£4  Is.  3d. 

TANGA,  Indian,  Gold,  value,  T^d.,  4  Tangas — 1  Pargo. 

TAOU,  Chinese,  Knife  coins,  early  brass,  cast. 

TAR,  Silver,  Hindoo,  value,  id,  current  on  the  coast  of  Malabar.     Tare. 

TARIN,  Sicihan,  Maltese,  Silver,  value,  20  Grani,  5th  of  a  Ducat. 

TARO,  Sicilian,  Silver,  value,  8|d.,  5  Tari — 1  Ducat;  and  Malta  value,  Hd. 

TELA,  Persian.     Various  value.     The  Tilla. 

TERUNCIUS,  Roman,  Brass,  3  oz.     4th  of  Libella. 

TESTER,  EngUsh,  SOver.     Coin  with  a  head  upon  it. 

TESTON,  ItaUan,  Silver,  value.  Is.  6d. 

TESTONE,  Portuguese,  SQver,  value,  5|d.,  100  Reis. 

TETRA  DRACHM,  Greek,  Silver,  value,  4  Drachmae,  the  Stater  Argen- 
teus,  value,  3s.  3d. 

TETROBOLUS,  Greek,  SUver,  value,  4  Oboli,  6tl 

THALER,  German,  Silver,  value,  2s.  lid.  Eirst  coined  in  Joachhns  Tlial, 
a  valley  in  Bohemia. 

THIRD  OF  A  GUINEA,  English,  Gold,  value,  Is. 

THRIMSA,  Anglo-Saxon.     Three  fifths  of  a  shilling. 

TICAL,  Siamese,  SBver,  nut-shaped.     The  Baat. 

TILL  A,  Persian,  Gold,  value,  13s.  4d.     The  Tela  and  TOa. 

TINFE,  Polish,  Silver,  value,  Is.  3d.     Timpfe. 

TOKENS,  English,  Copper,  issued  by  tradesmen  in  the  16th  and  18th  cen- 
turies ;  also  Silver,  English,  temp.  K.  George  III. 

TOKOO,  Ashantee,  Silver,  value.  8-1, 

TOMAN,  Persian,  Gold,  value,  10s.  3d.,  50  Abassis  or  Piastres.  Touman 
and  Tomaun. 

TOMPONG,  Malacca. 

TONGA,  Persian,  SUver,  value,  7s.  6d. 

TORNESE,  Neapolitan,  Copper.     2  to  the  Grano. 

TOUCH  PIECES,  English,  Silver.  Given  to  persons  touched  for  King's 
evil     Also  Gold. 

TOURNAY  GROAT,  Anglo-Gallic,  Silver,  temp.  K.  Henry  VIII. 

TOWN  PIECES,  English,  Copper,  tokens  issued  by  towns. 

TRARO,  Venetian,  Billon,  value,  2d.,  4  to  the  Lira  Austriaca. 

TREMISSIS,  Roman,  Gold,  value,  one  third  of  the  SoUdus,  4s. 

TRIDRACHM,  Greek,  Silver,  value,  3  Drachmae. 

TRIENS,  Roman.     Value,  one  third  of  the  As. 

TRIGROSS,  Pohsh.     Value,  2d. 

TRIOBOLUS,  Greek,  Silver.     The  Hemidrachm,  value,  4id. 

TRIPONDIUS,  Roman,  Brass,  value,  3  Ases. 

TSEEN,  Chinese,  Brass.     The  Cash. 

TURNER,  Soots,  Copper.     A  base  com.     Qu.  Tournois,  corned  at  Tours. 


NUMISMATIC    DICTIONARY.  191 

TURNOSE,  German,  Silver. 

TWENTY  SHILLING  PIECE,  English,  Silver,  tomp.  K.  Charles  I. 

TWO  GUINEA  PIECE,  English,  Gold,  from  temp.  King  Charles  IT 

TWO  PENNY  PIECE,  English,  Copper,  temp.  K.  George  III. 

TUNKA,  Hindoo,  Silver,  value,  2s. 

TYMFE,  Prussia,  Silver,  value,  Sid,  18  Old  Gross. 

U 
UCITTJ,  Peruvian,  species  of  Capsicum.     The  Pod,  used  as  a  coin. 
UDLI,  Hindoo,  SUver. 

UNCIA,  Roman  Brass.     Ounce,  12th  of  As. 
UNICORN,  Scots,  Gold,  temp.  K.  James  III 

UNIT,  English,  Gold,  value,  20s.  temp.  K.  James  L    Laureled  piecea. 
URDEE,  Bombay,  Copper. 
UTA,  Batavian.     At  Java. 
YELLON,  Spanish,  Copper.     Or  Billon. 
YICTORIATUS,  Roman,  Silver,  value,    4d.     The  Quinarius,  with  figure 

of  Victory. 
VINTEM,  Portuguese,  Copper,  value,   Id.,    50   to   the   Milreia,  20  Reis. 

Vintin,  at  Goa;  Yintem,  Spanish,  Gold  coiu. 
VIZ,  Bengal,  Copper. 

W 

WAMPAM,  Peage,  American,  shells  strung,  current  in  Pennsylvania,  10s. 

a  fathom. 
WADMAL,  African,  woolen, cloth  made  in  Iceland,  and  current 
WHITE  PEAKE,  Indian,  shens  aiiuiig,  ^s.  a  cubit,  18  in. 
WILLIAM,  Dutch,  Gold,  value,  16s.  5d.,  formerly  10  GuUders. 
WITTEN,  Hanoverian,  Silver,  10  Wittens— 1  Stiver,  current  at  Embden. 

Witten  Penning,  Danish,  Silver. 
WISSE  MUNTZEN,  Bavarian,  Billon,  inferior  to  current  coin. 
WOOD,  Angola,  a  red  kind  from  Malemba,  current. 

X 

XERAPHIN,  Hindoo,  SUver,  value,  2s.  Id. 
XERIPH,  Greece,  value,  10s. 

T 

TERMEEBESHLEK,  Turkish,  Gold,  value,  12s.  6d. 
YUZLIK,  Turkish,  Billon,  value,  2i  Piastres,  3d. 

Z 

ZAHL  PFENNIG,  German,  Brass,  the  Jeton,  or  reckoning  penny. 
ZARMAHBUB,  Greece,  Gold,  value,  6s.     Zurmahub,  Turkisli,  Gold,  tuu 
Sequin. 


192  NUMISMATIC    DICTIONARY. 

ZECCHINO,  Venetian,  Gold,  value,  9s.  5d.,   from  Zecea^  the  mint,  the 

Sequin  of  Turkey. 
ZENZKRLI,  Turkish.     Current  in  Egypt. 
ZIAM,  Barbary,  Gold,  value,  5s.  2d. 
ZlMBl,  Angola,  Shell.     The  Cowrie. 
ZLATY,  Hungarian,  Silver.     The  Florin. 
ZLOT,  Polish,  Silver,  value,  6d.,  30  Groschen,  15  Kopeca. 
ZODIAC  RUPEES,  Hindoo,  value,  Is.  ll^d.,  bear  the  different  signs  of  the 

Zodiac ;  there  are  also  Zodiac  Mohurs.. 
ZUZA,  Jewish,  Silver.     4th  of  a  Shekel. 
ZWANZIGER,  Austrian,  Silver,  value,  8d.,  20  Kreutzers. 
ZWEYDRITTEL,  Mecklenburg,  Silver,  value,   2s.    Two   thirds  of  Rix 

Dollar.     Danish,  value,  29.  lOd. 


THE    E  WD, 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


HCx 

1601 

H75b 

[Homans]  - 
llie  banker  *  s 

1870 

ooramon-place 

book. 

DEMCO  J»4N 

l|(;',(illlHIHt,Hl(-l'Hl/.|  ni',H,/-l',n/.!_IUTY 


AA  000  593  559  8 


HG 
1601 
H75b 
1870 


